Exam 9: Demand-Side Equilibrium: Unemployment or Inflation?

If saving exceeds investment,then the level of GDP will

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

Writing during the Great Depression,Keynes naturally focused on problems of

In the basic 45-degree line model,what is the effect of a decrease in the price level?

Figure 9-1 -In Figure 9-1,at $7,000 billion real GDP,

When GDP decreases,consumption spending increases.

When GDP is less than total spending,GDP will fall.

Because of a recession in Japan,net exports from the United States decrease by $10 billion.If the MPC is 0.75,how much less spending will occur in the U.S.economy in the second "round" of spending?

Table 9-1 -In Table 9-1,inventories are being depleted as long as output is below

In a simple economy (no government),the vertical distance between the consumption function and the expenditure schedule measures

In a capitalist market economy,recessions and inflation can occur because of coordination failures.

The economic impact of a change in spending,working through the multiplier,takes effect

As the multiplier process works through time,the size of the multiplier effect becomes

Recessions and depressions are the principal examples of

The actual multiplier for the U.S.economy is estimated to be

A given income-expenditure diagram always assumes a variable price level.

Figure 9-4 -In Figure 9-4,which expenditure level will cause an inflationary gap?

The multiplier principle is built on the premise that one person's spending is another person's

The price level effects consumer spending through changes in real

Differentiate between an induced increase in consumption and an autonomous increase in consumption.How are they represented on a graph?