Exam 20: The Is Curve

Use the following Situation to answer the question : situation 20-2 Assume a closed economy. Suppose that autonomous consumption equals $400, planned investment equals $500, government expenditure equals $200, net taxes equals $50, and the mpc equals 0.9. -Using the information in Situation 20-2,if taxes increase by $10,then the equilibrium aggregate output will change by

Economists define investment as the purchase of

A depreciation of the U.S. dollar makes American goods cheaper relative to foreign goods,resulting in a ________ in net exports in the U.S. and a ________ shift of the IS curve in the U.S. ,everything else held constant.

Everything else held constant,if disposable income increases by 200 and consumption expenditure increases by 150,the mpc is

Which of the following does NOT shift the IS curve?

In the Keynesian cross diagram,an increase in autonomous consumer expenditure causes the aggregate demand function to shift ________,the equilibrium level of aggregate output to rise,and the IS curve to shift to the ________,everything else held constant.

If actual output is less than equilibrium output,firms will ________ output to keep from ________ inventories.

Aggregate output is increased by a decrease in

In a closed economy,aggregate demand is the sum of

If actual output is greater than equilibrium output,firms will ________ output to keep from ________ inventories.

In the Keynesian cross diagram,a decline in autonomous consumer expenditure causes the aggregate demand function to shift down,the equilibrium level of aggregate output to ________,and the IS curve to shift to the ________,everything else held constant.

Points on the IS curve satisfy ________ market equilibrium.

Keynes believed that changes in autonomous spending were dominated by unstable fluctuations in ________,which are influenced by emotional waves of optimism and pessimism-factors he referred to as "animal spirits."

A decline in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________,everything else held constant.

Aggregate output is ________ related to autonomous consumer expenditure,and is ________ related to planned investment spending.

Assume that autonomous consumption equals $200 and that the mpc equals 0.8. If disposable income equals $1,000,then total consumption equals

Everything else held constant,if consumption expenditure falls by 160 when disposable income falls by 200,the mpc is

Everything else held constant,a shift in tastes in the U.S. toward Mexican goods will ________ net exports in the U.S. and cause the quantity of aggregate output demanded to ________ in Mexico.

There are two types of investment: ________ investment-the spending by business firms on equipment and structures,and planned spending on residential houses-and ________ investment-spending by business firms on additional holdings of raw materials,parts,and finished goods.

Use the following Situation to answer the question : situation 20-1 Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9. -Keynes believed that changes in autonomous spending were dominated by changes in