The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure, holding constant all other factors that affect aggregate expenditure. a) aggregate demand curve b) savings line c) 45-degree line d) consumption function

a. The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by A) investment spending. B) export spending. C) government spending. D) the level of aggregate expenditure. b. U.S. net export rises when A) the price level in the United States rises relative to the price level in other countries. B) the growth rate of U.S. GDP is slower than the growth rate of GDP in other countries. C) the value of the U.S. dollar increases relative to other currencies. D) the inflation rate is higher in the United States relative to other countries.

Find the value of aggregate supply when the consumption expenditure is $2000 and saving are $400

The graph in Figure I presents the annual GDP growth rate of the United States economy since the first quarter of 2004, while the graphs in Figure II represent three different scenarios of the relationship. between aggregate demand and supply that reflect different situations of economic growth. Answer the following questions in detail. Using the shifts in the aggregate demand curve in each of the three graphs in Figure II, explain the function of aggregate consumption and investment. Explain in detail what is happening in Graph A in Figure II and, after examining the data in the graph in Figure I, identify in what period of time said situation is occurring.

Which of the following would increase aggregate demand?   A) Increase in taxation.   B) Increase in savings.   C) Decrease in consumption spending.   D) Increase in government spending.

Consumption and Saving- End of Chapter Problem Which one of the following reasons makes it easier to forecast the impact of an income change on consumption for hand-to-mouth consumers than for consumption smoothers? It is easier because hand-to-mouth consumers only spend their permanent income. hand-to-mouth consumers save a large portion of their income. the marginal propensity to consume is 1 for consumption smoothers. hand-to-mouth consumers spend their entire income as they earn it.

According to Keynes' Law... The total demand for products determine the level of gross domestic product and may not equal the supply capacity of the economy in the short run. The total supply of products determines the level of gross domestic product and the level of demand in the economy in the long run. The total demand always equals the total supply capacity in the short run. The total demand tends to rise above the total supply capacity in the short run which leads to recessions 10 발 lyi

If the output level is such that the Y=AE line (45-degree line) is below the aggregate expenditure line, which of the following is true?   a Aggregate expenditure is greater than output, so inventories will decrease and output will increase. b Aggregate expenditure is less than output, so inventories will increase and output will decrease. c Aggregate expenditure is less than output, so inventories will decrease and output will increase. d Aggregate expenditure is greater than output, so inventories will increase and output will decrease.

Real aggregate expenditure, AE (trillions of dollars) 0 45° Y=AE AE Real GDP, Y (trillions of dollars) Refer to Figure 23-1. If the economy is at point L, what will happen? Inventories have fallen below their desired level, and firms decrease production. Inventories have risen above their desired level, and firms decrease production. Inventories have fallen below their desired level, and firms increase production. Inventories have risen above their desired level, and firms increase production.

Match the following terms ( terms are labeled 1-10 )to the correct definition(definitions are labeled a through J) aggregate consumption function, multiplier, planned aggregate expenditure (PAE), income-expenditure equlibrium GDP, marginal propensity to consume (MPC), consumption function, unplanned inventory investment, actual investment spending,inventory, autonomous spending A) The amount by which consumption rises when disposable income rise by one dollar marginal propensity to consume (MPC) B) The level of output (real GDP) at which output (real GDP) equals planned aggregate expenditure. income-expenditure equlibrium GDP C) The ratio of total change in real GDP caused by an autonomous change in aggregate spending. multiplier D) Total planned spending on final goods and services in the economy. aggregate consumption function E) The equation showing how individual household's consumer spending varies with its current disposable income. consumption function F) Consumption…