Exam 11: Expenditure Multipliers: They Keynesian Model

Suppose that the slope of the AE curve is 0.80. If prices remain constant and government expenditures increase by $10 billion, what will be the change in real GDP?

As a nation's GDP increases, that nation's

The Keynesian model of aggregate expenditure assumes that

List the components of aggregate expenditure and describe how each of them change as real GDP increases.

The larger the multiplier, the the AE curve and the the AD curve from an increase in investment.

What is the relationship between the slope of the aggregate expenditure curve and the multiplier?

Autonomous consumption is that portion of consumption expenditure that is not influenced by

The multiplier shows that as changes, real GDP changes by a amount.

-In the above figure, equilibrium expenditure is

Equilibrium expenditure occurs where the aggregate expenditure curve crosses the

In an economy with no income taxes or imports, the multiplier equals

If the slope of the saving function is 0.27, then the marginal propensity to .

If unplanned inventory changes are positive, what is the relationship between aggregate planned expenditure and real GDP?

An increase in the price level results in a

The marginal propensity to import defines the relationship between changes in imports and changes in

Suppose an economy has no income taxes or imports. If the MPC is 0.75, what does the multiplier equal?

What is the difference between induced and autonomous expenditure? Which components of aggregate expenditure fall under which category?

If investment increases by $300 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is

-In the above table, C is consumption expenditure, I is investment, G is government expenditure, X is exports, and M is imports. All entries are in dollars. If investment increased by $26 to $51 then equilibrium expenditure will

The marginal propensity to save (MPS) is