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

Assume that the MPC is .9 and investment falls by $30 billion.What is the change in real GDP?

If the U.S.economy is experiencing falling price levels, the

Figure 9-1 -In Figure 9-1, at $3,000 billion real GDP,

Figure 9-3 -In Figure 9-3, equilibrium GDP is

Figure 9-4 -In Figure 9-4, which expenditure level will result in a recessionary gap?

A major Internet service provider decides to spend $70 million to purchase new server equipment.If the marginal propensity to consume is 0.8, the eventual change in GDP will be

The U.S.economy in 2009 was characterized by an excess level of output.This corresponds to a recessionary gap.

In the standard 45-degree line expenditure model, the C + I line and the C line are parallel because,

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, the equilibrium level of output is

The slope of the aggregate demand curve illustrates that real GDP demanded will increase when

An expenditure schedule model with no government sector shows the relationship between

If the multiplier is 4 and real GDP increases by $520 billion, the increase in investment spending must have been

A decrease in the price level causes a lower equilibrium quantity demanded.

Economists are very good at explaining how individual markets work.Economists are less successful at explaining

For a simple economy (no government, no foreign sector), the condition for equilibrium can be stated correctly as

Figure 9-3 -In Figure 9-3, investment plus net exports equals

When demand for goods and services is high, firms are more likely to hire more workers.

For a given price level, a downward shift of the expenditures schedule corresponds to an

The slope of the aggregate demand curve illustrates that as the price level rises,

An increase in autonomous consumption has the same equilibrium effect as a(n)