Exam 20: The Is Curve

In the Keynesian model of income determination,consumer expenditure includes spending by

Points on the IS curve satisfy ________ market equilibrium.

An increase in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.

The ________ describes points for which the goods market is in equilibrium.

Keynes mentioned two factors that influenced planned investment spending

When the interest rate rises

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

In the Keynesian cross diagram,an increase in investment spending because companies become more optimistic about investment profitability 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.

An autonomous depreciation of the U.S.dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S.net exports,everything else held constant.

In the simple Keynesian model,equilibrium aggregate output is determined by

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.

If the consumption function is C = 20 + 0.5YD,then an increase in disposable income by $100 will result in an increase in consumer expenditure by

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

A fall in inventories is synonymous with ________ investment.

Under Keynesian analysis,aggregate demand can be written as

In an open economy,aggregate demand is the sum of

In the Keynesian framework,as long as output is ________ the equilibrium level,unplanned inventory investment will remain positive and firms will continue to ________ production.

Aggregate output is increased by a decrease in

When the interest rate is ________,________ investments in physical capital will earn more than the cost of borrowed funds,so planned investment spending is ________.

In the Keynesian framework,as long as output is above the equilibrium level,unplanned inventory investment will remain ________ and firms will continue to ________ production.