Econ pratice

with consumption expenditure on the vertical axis and disposable income on the horizontal axis, the consumption function intersects the 45 degree line at 8 trillion. this indicates that

consumption spending is more than 8 trillion because taxes have been paid

if the mpc increases the slope of ae curve would

increase

if the level of real gdp is 17 trillion

inventories are above the levels planned by firms

when aggregate planned expenditure is less than real gdp, unplanned

investment occurs

the economy is at point A and the money wage rate rises by 10 percent. if the price level is constant firms will be willing to supply output equal to

less than $16.0 trillion

when there is unplanned investment, aggregate planned expenditure is______ real gdp and actual investment is _______ planned investment

less than, greater than

when the price level is 120 if the aggregate demand does not change then the

money wage rate will fall in the future

the short run aggregate supply curve is upward sloping because

money wage rates do not immediately change when the price level changes

as disposable income increases there is a _______ the saving function

movement along

Which of the following statements regarding aggregate supply are correct?

moving along the long run aggregate supply curve both the price level and the money wage rate change by the same percentage

at equilibrium expenditure, unplanned changes in inventory

must be zero

an increase in disposable income shifts

neither the consumption function or the savings function because it leads to a movement along both the consumption and savings

the marginal propensity to consume is

never greater than 1

the mps equals the ratio of

none of the above

which of the following statements is true

the long run aggregate supply curve is vertical

moving along the short run aggregate supply curve

the money wage rate, the prices of other resources and potential gdp constant

a change in _____ results in a movement along the short run aggregate supply curve but does not shift the short run aggregate supply curve

the price level

an aggregate supply curve depicts the relationship between

the price level and the aggregate quantity supplied

an aggregate supply curve depicts the relationship between

the price level and the quantity of real gdp supplied

a fall in the money wage rate shifts

the sas curve right but leaves the las curve unchanged

the Keynesian model of aggregate expenditure describes the economy in

the short run

based on the data in the table above at the short run equilibrium

the unemployment rate is greater than the natural unemployment rate

in the above figure, at a disposable income level of 2 trillion saving equals

zero

equilibrium real gdp is equal to

16 trillion

what is the level of aggregate planned expenditure when real gdp is equal to 900 trillion

796

when the quantity of capital increases then the

SAS curve shifts rightward and the LAS curve shifts rightward

which of the following increases aggregate demand

a decrease in taxes

the shift from ad1 to ad2 might have been the result of

a decrease in taxes, an increase in the quantity of money, and increase in gov expenditure

in the above figure the movement from point b to point a might be the result of

a fall in the price level

in the above figure the economy is initially at point b if taxes increase there is

a shift to AD2

in the above figure the economy is initially at point b. if the gov decreases transfer payments there is

a shift to ad2

if real gdp is greater then 15 trillion inventories will be

above target levels so firms will decrease production

if planned expenditure equals 16 trillion when real gdp is 16.5 trillion then

actual investment will exceed planned investment

inflation occurs over time as a result of

aggregate demand increasing faster than las

there is a movement along the consumption function if there is

an increase in disposable income

which of the following shifts the aggregate demand curve rightward

an increase in gov expenditure

moving along the aggregate demand curve a decrease in the quantity if real gdp demanded is a result of

an increase in the price level

which of the following shifts the aggregate demand curve right

an increase in the quantity of money

which of the following increases aggregate demand and shifts the ad curve rightward

an increase in the quantity of money and a resulting fall in the interest rate

suppose the price level the money wage rate and the price of all other resources rise by 10% this set of changes leads to

an upward movement along the las curve

suppose the equilibrium level of expenditure is 13 trillion, if real gdp is 14 trillion, then planned expenditures

are less than real gdp and real gdp will decrease

expenditure that does not depend on real gdp is called

autonomous expenditure

the us monetary policy implemented in 2008 was an attempt to

decrease interest rates in order to stimulate business investment and consumption expenditure thereby increasing AD

between 2013 and 2014 the gov estimates that disposable income in the u.s. decreased. consequently as a result of this, consumption expenditure

decreased

a decrease in gov expenditure on goods and services

decreases aggregate demand

which of the following can be said about economic growth

economic growth is the result of increases in las

suppose the economy is experiencing a recessionary gap in the long run if aggregate demand does not change the following events happen: the money wage rate ____ unemployment______ and the price level______

falls/falls/falls

in the above figure which part corresponds to a fall in the money wage rate

figure d

if aggregate planned expenditure is less than real gdp then

firms inventories will increase and real gdp will decrease as production falls

if the mpc equals .75 then

for every 100 increase in disposable income saving increases by 25

the u.s fiscal policy implemented in 2008 was an attempt to

give billions of dollars to businesses and low and middle income americans in order to stimulate business investment and consumption expenditure and thereby increase AD

dissaving

occurs when consumption is greater than disposable income

we distinguish between the long run aggregate supply curve and the short run supply curve in the long run

real gdp equals potential gdp

in the above figure if the economy is at point a an increase in _____ will move the economy to

real wealth from the fall in price level/ point c

as the economy adjusts toward equilibrium the

sas curve will shift left

the curve labeled A in the above figure will shift rightward when

technology increases or the quantity of capital increases

if you 1000 in wealth and the price level increases by 20 percent then

the 1000 will buy fewer goods and services

if the money prices of resources changes

the SAS curve shifts

the marginal propensity to consume measures

the fraction of change in disposable income that is spent on consumption expenditure

a movement along the consumption function to higher levels of consumption expenditure arises because

the level of disposable income increases