Exam 9: Aggregate Demand

The larger the marginal propensity to save,other things constant,_____.

A decrease in disposable income will:

An increase in the price level in an economy will _____.

If a household's income falls from $26,000 to $24,000 and its saving falls from $1,000 to $500,then its _____.

Which of the following is true of government purchases?

Assume an economy is in equilibrium at a real GDP of $5 trillion.If aggregate expenditure (AE)increases by $1 trillion,the economy's equilibrium real GDP is likely to _____.

If there are no unintended changes in inventories,the economy is at its equilibrium level of real gross domestic product (GDP)demanded.

A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve.

The slope of the consumption function is equal to the marginal propensity to save (MPS).

The aggregate demand curve of an economy illustrates the relationship between:

The figure given below shows the income-expenditure model.At point C,_____.

The aggregate expenditure line shows total planned spending at each _____.

In the simple aggregate expenditure model,the slope of the aggregate expenditure line depends on:

Expectations that disposable income will increase in the future will _____.

The smaller the marginal propensity to save,other things constant,_____.

If incomes in the United States increase,other things equal,then U.S._____.

The fraction of a change in disposable income that is consumed is called _____.

The amount of U.S.exports to the rest of the world is primarily determined by _____.

Which of the following is not an example of a government purchase?

Aggregate expenditure means total or combined spending.