Exam 21: The Is Curve

Points on the IS curve satisfy ________ market equilibrium.

Under Keynesian analysis, aggregate demand can be written as ________.

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

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

If aggregate demand equals output, ________.

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

If Canadian university students decide that drinking Mexican-brewed beer helps one get noticed, net exports will tend to fall, causing aggregate demand to ________ and the ________ curve to shift to the left, everything else held constant.

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

If net exports decrease by 250 and the mpc is 0.75, equilibrium aggregate output ________.

A decline in autonomous consumer expenditure 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.

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

Aggregate output is increased by a decrease in ________.

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.

If aggregate demand is less than the level of aggregate output, then ________ inventory investment will be ________.

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.

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

When interest rates fall in the United States (with the price level fixed), the value of the dollar ________, domestic goods become ________ expensive, and net exports ________.

If unplanned investment is positive, firms will ________ production and output will ________.