Exam 26: Demand-Side Equilibrium: Unemployment or Inflation?

Identify the "oversimplified multiplier formula."

Producers will change their prices when GDP is at the equilibrium level.

The inflationary gap is the

A rising price level should shift the expenditure schedule

One of the main conclusions of Keynes in The General Theory of Employment, Interest, and Money is that the economy

Inventory reductions are a signal indicating that

Table 9-1 1000 800 500 100 1500 1200 500 100 2000 1600 500 100 2500 2000 500 100 3000 2400 500 100 3500 2800 500 100 4000 3200 500 100 -In Table 9-1, at output of 4,000, inventories are

Assume that the MPC is 0.85 and investment spending rises by $100 million.How much consumption spending will this generate in the second round of spending?

Where does equilibrium occur in an income expenditure diagram? What would be the effect if production is at either on the left or right side of the equilibrium point?

Which of the following occurs when party A would like to change his behavior if party B would change hers, and vice versa, and yet the two changes do not take place because the decisions of A and B are made independently?

John Maynard Keynes concluded that investment spending is determined by

Recessions and depressions are the principal examples of

Using the standard 45-degree line diagram, how does an increase in autonomous consumption effect the expenditure schedule?

An increase in the U.S.price level will

If the price level rises, the effect on the expenditure schedule and equilibrium real GDP is to

A major reason for the existence of inflationary and deflationary gaps is that

The reason for the multiplier effect is that

The counterpart to the unsold output of firms is the lack of jobs for workers willing to work.

If net exports decrease, the expenditure schedule will

Equilibrium GDP occurs when total spending equals total output.