Exam 11: Income and Expenditure

The level of productive capacity _____ planned investment spending.

If real GDP is $1,000 billion and the aggregate expenditure is $850 billion, then the change in inventories will be:

The marginal propensity to save plus the marginal propensity to consume must equal:

If real GDP equals $700 billion and planned aggregate expenditures equal $400 billion:

In an economy with no international trade, no government expenditure, no transfers, and no taxes, disposable income equals GDP. Therefore, it follows that:

In an economy without government purchases, government transfers, or taxes, aggregate autonomous consumer spending is $250 billion, planned investment spending is $100 billion, and the marginal propensity to consume is 0.6. What is the expression for planned aggregate spending?

When the economy is in income-expenditure equilibrium:

An unplanned fall in inventories leads to:

The marginal propensity to save is the increase in household savings when _____ increase(s) by $1.

The slope of the consumption function equals the slope of the:

Inventory investment can be:

If real GDP exceeds aggregate expenditures, the economy will:

In 2005, Airbus Co. purchased raw materials worth $400 million to manufacture airplanes for a total value of $900 million. In that year, Airbus Co. sold airplanes for a total value of $800 million. During 2005, Airbus Co. registered inventory investment of:

Assuming no taxes and no trade, the multiplier equals:

If real GDP is greater than planned aggregate spending:

Suppose that the marginal propensity to consume is 0.8 and investment spending increases by $100 billion. The increase in real GDP is:

According to the accelerator principle:

Actual investment equals:

Use the following to answer questions: -(Figure: Aggregate Expenditures and Real GDP) Use Figure: Aggregate Expenditures and Real GDP. At a real GDP of $9,000 billion:

If planned investment spending increases, the planned aggregate spending line: