Exam 20: The Is Curve

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

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

Other things equal,a decrease in autonomous consumption shifts the ________ curve to the ________.

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

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

If young business professionals in America suddenly decide that driving German-made cars is an important status symbol,net exports will tend to ________ causing aggregate demand to ________,everything else held constant.

Economists define investment as the purchase of

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.

The Federal Reserve increases interest rates when it wants to reduce aggregate demand to fight inflation.How do increases in the interest rate reduce aggregate demand?

Assume that disposable income equals $1000 and the mpc equals 0.6.If total consumption equal $800,then autonomous consumption is equal to

Using the information in Situation 20-2,if taxes increase by $10,then the equilibrium aggregate output will change by

Assume that autonomous consumption equals $200 and that the mpc equals 0.8.If disposable income equals $1000,then total consumption equals

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.

If the consumption function is C = 20 + 0.8YD,then an increase in disposable income by $100 will result in an increase in consumer expenditure by

If net exports increase by 100 and the mpc is 0.75,equilibrium aggregate output increases by

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.

If net exports increase by 250 and the mpc is 0.75,equilibrium aggregate output increases by

In the Keynesian cross diagram,a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________,the equilibrium level of aggregate output to fall,and the IS curve to shift to the ________,everything else held constant.

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

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