Exam 12: Aggregate Expenditure and Output in the Short Run

C = 2,550 + (MPC)Y I = 800 G = 1,100 NX = 50 If the equilibrium level of GDP is $11,250,using the equations for C,I,G,and NX shown above,find the value of the marginal propensity to consume.

At macroeconomic equilibrium,

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP,then

Autonomous expenditure is a type of expenditure that does not depend on

If consumption is defined as C = 4,500 + 0.75Y,then the marginal propensity to save is 0.25.

If planned aggregate expenditure is less than real GDP,some firms will experience unplanned increases in inventories.

On the 45-degree line diagram,the 45-degree line shows points where

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

What are inventories? What usually happens to inventories at the beginning of a recession,and what usually happens to inventories at the beginning of an expansion?

If disposable income falls by $40 billion and consumption falls by $30 billion,then the slope of the consumption function is

The change in consumption divided by the change in disposable income is equal to

Table 12-11 -Refer to Figure 12-3.Suppose that government spending increases,shifting up the aggregate expenditure line.GDP increases from GDP₁ to GDP₂,and this amount is $400 billion.If the MPC is 0.75,then what is the distance between N and L or by how much did government spending change?

Ceteris paribus,how does an expansion in the United States affect U.S.net exports?

Which is the largest component of aggregate expenditure?

Which of the following is a true statement about the multiplier?

Which of the following leads to an increase in real GDP?

A decrease in the real interest rate will

If planned aggregate expenditure equals GDP,the economy is in macroeconomic equilibrium.

________ is defined as the value of a household's assets minus the value of its liabilities.

Use a 45-degree diagram to illustrate macroeconomic equilibrium.Make sure your diagram shows the aggregate expenditure function.Include in your diagram a point where aggregate expenditure is greater than GDP and a point where aggregate expenditure is less than GDP.