Exam 21: The Is Curve

An autonomous depreciation of the Canadian dollar makes Canadian goods ________ relative to foreign goods and results in a ________ in Canadian net exports, everything else held constant.

The ________ traces out the points for which total quantity of goods produced equals total quantity of goods demanded.

Under Keynesian analysis, aggregate demand can be written as ________.

Economists define investment as the purchase of ________.

A decrease in autonomous planned investment spending, other things equal, shifts the ________ curve to the ________.

Factors that influenced planned investment spending include ________.

Assume equilibrium at full employment for an economy characterized by the simple Keynesian model. If the government raises taxes to eliminate a budget deficit, then ________.

There are two types of investment: ________ investment-the spending by business firms on equipment and structures, and planned spending on residential houses-and ________ investment-spending by business firms on additional holdings of raw materials, parts, and finished goods.

Situation 20-2 Assume a closed economy. Suppose that autonomous consumption equals $400, planned investment equals $500, government expenditure equals $200, net taxes equals $50, and the mpc equals 0.9. -Using the information in Situation 20-2, if taxes increase by $10, then the equilibrium aggregate output will change by ________.

Aggregate output is ________ related to autonomous consumer expenditure, and is ________ related to the level of taxes.

An autonomous appreciation of the Canadian dollar makes Canadian goods ________ expensive relative to foreign goods which ________ net exports in Canada.

A shift in tastes toward foreign goods ________ net exports in Canada and causes the quantity of aggregate output demanded to ________ in Canada, everything else held constant.

If aggregate demand is less than the level of aggregate output, then ________ inventory investment will be ________.

Everything else held constant, changes in the interest rate affect planned investment spending and hence the equilibrium level of output, but this change in investment spending ________.

An increase in autonomous consumer expenditure causes the aggregate demand function to shift up, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant.

A decrease in unplanned inventory investment for the entire economy equals the excess of ________.

If the consumption function is expressed as C = a + mpc × Y_D, then "a" represents ________.

A shift in tastes toward Canadian goods ________ net exports in Canada and causes the IS curve to shift to the ________ in Canada, everything else held constant.

If net exports increase by 100 and the mpc is 0.75, equilibrium aggregate output increases by ________.

Everything else held constant, if aggregate output is to the right of the IS curve, then there is an excess ________ of goods which will cause aggregate output to ________.