question
Changes in which of the following leads to a shift of the aggregate consumption function?
answer
I. expected future disposable income
II. aggregate wealth
II. aggregate wealth
question
The slope of a family's consumption function is equal to ___________.
answer
c. the marginal propensity to consume.
question
Given the consumption function c = $16,000 + 0.5y if the individual household current disposable income is $20,000 individual household consumer spending will equal _________.
answer
b. $26,000
question
The level of planned investment spending is negatively related to the _________.
answer
d. interest rate.
question
Actual investment spending in any period is equal to ________________________.
answer
a. planned investment spending + unplanned inventory.
question
Which of the following explains the slope of the aggregate demand curve?
answer
I. the wealth effect of a change in the aggregate price level
II. the interest rate effect of a change in the aggregate price level
II. the interest rate effect of a change in the aggregate price level
question
Which of the following will shift the aggregate demand curve to the right?
answer
c. a decrease in the existing stock of capital
question
The Consumer Confidence Index is used to measure which of the following?
answer
c. consumer expectations
question
Decreases in the stock market decrease aggregate demand by decreasing which of the following?
answer
a. consumer wealth
question
Which of the following government policies will shift the aggregate demand curve to the left?
answer
a. a decrease in the quantity of money
question
Which of the following will shift the short-run aggregate supply curve? A change in ___________________.
answer
d. productivity
question
Because changes in the aggregate price level have no effect on aggregate output in the long run, the long-run aggregate supply curve is ____________.
answer
a. vertitcal
question
The horizontal intercept of the long-run aggregate supply curve is ____________.
answer
c. at potential output
question
A decrease in which the following will cause the short run aggregate supply curve to shift in the left?
answer
d. productivity
question
That employers are reluctant to decrease nominal wages during economic downturns and raise nominal wages during economic expansions leads nominal wages to be described as ___________.
answer
e. sticky
question
Which of the following causes a negative supply shock?
answer
III. an increase in oil prices
question
Which of the following causes a positive demand shock?
answer
increase in wealth
question
During stagflation, what happens to the aggregate price level and real GDP?
answer
aggregate price level increase
real GDP decreases
real GDP decreases
question
Which of the following is true if this economy is operating at P and Y?
answer
II. It is in short-run macroeconomic equilibrium.
question
The economy depicted in the graph is experiencing a _____________.
answer
recessionary gap
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