Exam 9: The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

The level of investment spending I is equal to

Fluctuations in real GDP are called

In the short-run, each of the following is true except

If prices are sticky, the level of real GDP is determined by

If the real interest rate decreases,

The equilibrium level of national income is equal to

If the level of autonomous spending is $6000 billion, the marginal propensity to expend is .4, and the level of national income is $8000, planned expenditures would be equal to

The economy can be out of equilibrium even though total expenditures equal national income

If the marginal propensity to expend is equal to .4, and the level of autonomous spending increases by $1500 billion, the equilibrium level of national income will

The flexible-price model does not give a complete picture of the macroeconomy for each of the following reasons except

If the real interest rate decreases,

If the marginal propensity to consume decreases, the marginal propensity to expend will _______ and the value of the multiplier will ________.

In the expansion or boom phase of the business cycle, each of the following generally occurs except

If foreign real income decreases,

In the sticky price model of the macroeconomy,

If prices are sticky, lower planned expenditure will

Each of the following facts about the economy of the United States over the decade of the 1990s is true except

If the tax rate increases,

In the sticky-price model, a decrease in the baseline level of consumption spending will not result in an increase in savings, and thus a reduction in the real interest rate, because

The questions with which Chapter 9 is concerned include each of the following except