Exam 20: The Is Curve

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.

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.

His analysis started with the recognition that the total quantity demanded of an economy's output was the sum of four types of spending: consumer expenditure,planned investment spending,government spending,and net exports.

An autonomous appreciation of the U.S.dollar makes American goods ________ expensive relative to foreign goods which ________ net exports in the U.S.

The marginal propensity to consume (mpc)can be defined as the fraction of

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

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.

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 ________ and the equilibrium level of aggregate output to ________,everything else held constant.

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

A shift in tastes toward foreign goods ________ net exports in the U.S.and causes the IS curve to shift to the ________ in the U.S.,everything else held constant.

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

Using the information in situation 20-2,if government increases their spending by $50 and increases net taxes by 50,then equilibrium aggregate output will change by

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.

Keynes believed that changes in autonomous spending were dominated by changes in

If aggregated demand is less than actual output,unplanned inventory ________ will cause output to ________.

Assume that autonomous consumption equals $200 and disposable income equals $1000. If total consumption equal $800,then the mpc equals

A shift in tastes toward American goods ________ net exports in the U.S.and causes the quantity of aggregate output demanded to ________ in the U.S.,everything else held constant.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.

Points on the IS curve satisfy ________ market equilibrium.

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