Exam 11: Income and Expenditure

The initial impact of a sudden decrease in the expected growth rate of GDP will MOST likely be a(n) _____ in _____ investment spending.

In an economy without government purchases, government transfers, or taxes, aggregate autonomous consumer spending is $750 billion, planned investment spending is $300 billion, and the marginal propensity to consume is 0.75. What is the expression for planned aggregate spending?

In a simple, closed economy (no government or foreign sector), if disposable income increases by $100 and $30 is saved, _____ is consumed.

Income-expenditure equilibrium real GDP is the level of real GDP at which:

The marginal propensity to consume is:

In a simple, closed economy (no government or foreign sector), if the marginal propensity to consume increases, the marginal propensity to save will:

A $70 million decrease in investment spending will cause real GDP to:

Inventory investment is:

The multiplier is:

The marginal propensity to consume equals the:

Negative inventory investment occurs when companies _____ their inventories _____.

In a simple, closed economy (no government or foreign sector), if disposable income increases by $1,000 and consumption increases by $600, the multiplier is:

Actual investment spending equals:

According to the accelerator principle there is a _____ relationship between _____ and planned investment spending.

Use the following to answer questions: -(Figure: Aggregate Expenditures I) Use Figure: Aggregate Expenditures I. The equilibrium real GDP is:

In a simple, closed economy (no government or foreign sector), if the marginal propensity to consume is 0.7, the marginal propensity to save must be:

In a simple, closed economy (no government or foreign sector), if the marginal propensity to save is 0.2, the marginal propensity to consume must be:

Aggregate spending increases when:

Use the following to answer questions: -(Figure: Aggregate Expenditures I) Use Figure: Aggregate Expenditures I. When real GDP is $700 billion, there will be a _____ in unplanned inventory investment.

An increase in the expected disposable income of households _____ the planned aggregate spending line.