Econ Ch 10

If consumer spending increases, other things constant, the aggregate demand curve shifts inward.

False

A decrease in planned investment would shift the

aggregate demand curve inward

Which of the following would cause a rightward shift of the aggregate demand curve?

an increase in planned investment

In the simple aggregate expenditures model, planned investment is

autonomous

As the U.S. price level rises relative to price levels in other countries, what would happen in the U.S.?

consumption and net exports would decline

In an economy without a government and without international transactions, aggregate expenditure at each level of income is equal to

consumption plus planned investment

An increase in the U.S. price level, other things constant, would

decrease US exports and increase US imports

An increase in the price level will

shift the aggregate expenditure line downward

is defined as 1.0 divided by the marginal propensity to save

simple multiplier

real GDP on the horizontal axis and aggregate expenditure on the vertical axis

the aggregate expenditure line shows

The aggregate demand curve illustrates a relationship between

the price level and real GDP

the aggregate expenditures line shifts downward; the economy moves upward along the aggregate demand curve

the price level rises

If planned spending exceeds planned output, the result is

unintended inventory reduction

Which of the following is illustrated by the distance between the aggregate expenditure line and the 45-degree line at each level of real GDP?

unplanned inventory change

The slope of the aggregate expenditure line equals the marginal propensity to consume.

True

The aggregate expenditure line shows total planned spending at each

income level, holding the price level constant

A decrease in price level will

increase the level of aggregate quantity demanded