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

The level of consumption spending is equal to

An economy that is more open to world trade will have a

If prices are sticky, higher planned expenditure will

Each of the following is a possible reason why prices are sticky except

In the sticky-price model, the consequences of a decrease in the marginal propensity to consume include each of the following except

The intercept term of the consumption function is

The change in consumption expenditures which results from a $1 change in income is equal to

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

The marginal propensity to expend (MPE) is equal to

If the marginal propensity to consume increases,

The change in consumption expenditures which results from a change in income is equal to

If foreign real income decreases,

The parameters of the investment spending equation are

To understand business cycles, we need a model that does not guarantee always-full employment because

If the level of autonomous spending is $6000 billion, the marginal propensity to expend is .4, and the level of national income is $10000, planned expenditures would be equal to

The equation for of the spending multiplier is

In the flexible-price model, the consequences of an increase in the baseline level of consumption spending include each of the following except

If C_y = .75, t = .2, IM_y = .2, the value of the multiplier would be

On the income-expenditure diagram, the economy reaches equilibrium when

In the flexible-price model, the consequences of a decrease in the marginal propensity to consume include each of the following except