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

In a market economy,the decisions about what to produce and how much of each good or service to produce are made by

The MPC in the U.S.economy has been estimated to be near 0.95.If this is an accurate measure,then the numerical value for the multiplier would be

What is a multiplier? How does the multiplier effect occur?

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

When the price level in the United States rises,then net exports should

Why does an increase in the price level cause a decrease in real GDP demanded?

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?

Equilibrium is the point where total spending equals total output,or GDP.

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

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

The economic impact of the multiplier is ____,and then becomes ____.

When aggregate demand exceeds current production

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

One of the possible consequences of the expenditure schedule lying below the level of full employment GDP is

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

If the MPC is .67,then the oversimplified multiplier is

If inventory levels are decreasing,then we should expect business firms to

In a simple economy (no government sector),the equilibrium level of GDP will be less than the full employment level of income if,at the full employment level of income,the

Each C + I + G + (X − IM)expenditure schedule is drawn assuming a specific

A rising price level should shift the expenditure schedule