Exam 12: Aggregate Expenditure and Output in the Short Run

The consumption function describes the relationship between

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to consume is 0.85.

From 1983-2013,________ for the United States were negative.

If planned aggregate expenditure is greater than total production,

Figure 12-2 -Refer to Figure 12-2.If the U.S.economy is currently at point K,which of the following could cause it to move to point N?

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

If disposable income falls by $50 billion and consumption falls by $40 billion,then the slope of the consumption function is

The key idea of the aggregate expenditure model is that in any particular year,the level of GDP is determined mainly by

At macroeconomic equilibrium,total ________ equals total ________.

Actual investment spending includes spending by consumers on

Net exports usually ________ when the U.S.economy is in a recession and ________ when the U.S.economy is expanding.

If inventories decline by more than analysts predict they will decline,this implies that

An increase in the price level in the United States will have what effect on the aggregate expenditure line?

Given the equations for C,I,G,and NX below,what is the marginal propensity to consume? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

Actual investment spending does not include

Why do economists care about aggregate expenditures?

________ spending follows a smooth trend whereas,________ spending is more volatile and subject to fluctuations.

The ________ model focuses on the relationship between total spending and real GDP in the short run,assuming the price level is constant.

What is the formula for the multiplier? Explain why this formula is considered to be too simple.

An increase in taxes will ________ consumption spending,and a decrease in transfer payments will ________ consumption spending.