Exam 20: The Is Curve

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

Everything else held constant,if aggregate output is to the ________ of the IS curve,then there is an excess ________ of goods which will cause aggregate output to fall.

Aggregate demand in an economy with no government or foreign trade is

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

Equilibrium output is reduced by an increase in

Which of the following does not shift the IS curve?

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?

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.

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."

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

In the Keynesian framework,as long as output is above 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 ________,firms will continue to raise production,and output will continue to rise.

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

Planned investment spending,a component of aggregate demand,is equal to

If the interest rate falls,other things being equal,investment spending will

Keynes was especially concerned with explaining the ________ level of output and employment during the ________.

Using the information contained in Situation 20-1,if planned investment decreases by $100,the equilibrium aggregate output will change by

Assume equilibrium at full employment for an economy characterized by the simple Keynesian model.If the government raises taxes to eliminate a budget deficit,then

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

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.