Exam 11: Expenditure Multipliers: the Keynesian Model

Disposable income (dollars) Consumption exp enditure (dollars) 100 225 200 300 300 375 400 450 500 525 600 600 -Using the above table, if disposable income is $400, saving is

The MPC and MPS

Which of the following is NOT an autonomous expenditure in the aggregate expenditures model?

With consumption expenditure on the vertical axis and disposable income on the horizontal axis, the consumption function intersects the 45-degree line at $8 trillion. This result indicates that

The marginal propensity to consume is

Explain why the multiplier is greater than 1.

The smaller the slope of the AE curve, .

-Real GDP equals $20 billion and aggregate planned expenditure is $30 billion. There is an unplanned in inventories of and real GDP will .

When autonomous expenditure changes, the horizontal distance by which the aggregate demand curve shifts

With a steep short-run aggregate supply curve,

Business cycle turning points are

Suppose that the slope of the AE curve is 0.67. Then a $100 increase in autonomous spending means equilibrium expenditure will

-In the above figure, the line AB is called

The above table has data on the consumption function in the nation of Mojo. a) What is the amount of autonomous consumption expenditure? b) What is the marginal propensity to consume?

The slope of the consumption function is

Disposable income is divided into

-In the above figure, at the equilibrium, induced expenditure is

A fall in the price level shifts the AE curve_________ and _________equilibrium expenditure.

Disposable income (dollars) Consumption exp enditure (dollars) 100 225 200 300 300 375 400 450 500 525 600 600 -Using the data in above table, the marginal propensity to consume is

When disposable income equals $800 billion, planned consumption expenditure equals $600 billion, and when disposable income equals $1,000 billion, planned consumption expenditure equals $760 billion. What is the marginal propensity to save?