Exam 12: Aggregate Expenditure and Output in the Short Run

Into which category of aggregate expenditure would each of the following transactions fall? a.Sandra MacMillian purchases a new Ford Focus. b.The city of Richardson buys 5 new garbage trucks. c.Adrian Garcia buys a newly constructed townhome. d.A consumer in Latvia orders an iPhone from Apple. e.Ford Motor Company buys 300 new iPhones from Apple.

When we graph consumption as a function of ________ rather than as a function of disposable income,the slope of this consumption function is ________.

The multiplier is calculated as the

As a result of slow economic growth following the recession of 2007-2009,many companies including Cisco Systems,Lockheed Martin,and Cracker Barrel Old Country Store cut production and employment as a result of the sluggish growth in the total amount of spending in the economy.The total amount of spending in the economy is known as

The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in the economy.

What is the difference between aggregate expenditure and consumption spending?

An increase in the price level in the United States will reduce exports and increase imports.

During a(n)________ many firms experience reduced profits,which reduces ________ and investment spending.

An increase in Social Security payments will

If the economy is currently in equilibrium at a level of GDP that is above potential GDP,which of the following would move the economy back to potential GDP?

On the 45-degree line diagram,for points that lie below the 45-degree line,

If the consumption function is defined as C = 5,500 + 0.9Y,what is the multiplier?

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year,inventories actually grew by $400,000.This implies that

Each of the following is one of the four main categories of spending identified by John Maynard Keynes except

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

Equations for C,I,G,and NX are given below.If the equilibrium level of GDP is $32,000,what will the new equilibrium level of GDP be if government spending increases to 2,500? C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500

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

________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP.

A decrease in aggregate expenditure has what result on equilibrium GDP?