Macroeconomics Questions

When the economy is on the short-run aggregate supply curve and to the left of the long-run aggregate supply curve, actual aggregate output will eventually equal potential output as:

If the planned aggregate spending rises by $25 billion and the MPC is .8, then GDP changes by:

The interest rate effect states that as the aggregate price level rises, holding everything else constant, people demand:

Use Table 16-3. If real GDP is $3,000 billion, then unplanned investment will be:

Suppose investment spending increases by $50 billion, and as a result real GDP increases by $200 billion. The value of the MPC is:

The slope of the planned aggregate spending line is determined by:

The aggregate demand curve is negatively sloped in part because of the impact of interest rates on:

According to the aggregate demand curve, when the aggregate price level _________, the quantity of _________.

Suppose that a financial crisis decreases investment spending by $100 billion and the marginal propensity to consume is 0.80. Assuming no taxes and no trade, by how much will real GDP change?

An increase in the wealth of households, all other things unchanged, may be expected to result in _______ the aggregate consumption function.

Scenario 16-2: Income-Expenditure EquilibriumSuppose GDP is $8,000, autonomous consumption is $500, and planned investment spending is $200. The marginal propensity to consume is 0.8.Use Scenario 16-2. At the current level of GDP, how much is unplanned inventory investment?

1. reduced taxation (increases disposable income)2. weak exchange rate (boost export growth)3. lower interest rates (more credit)- Anything that increases aggregate demand

a general decrease in the average level of prices, which can be very damaging to an economy

1. demand-pull factors2. cost-push factors3. imported inflation4. government-induced inflation

1. wage increases 2. higher raw material costs3. higher taxes- Anything that increases a firm's cost of production

the way in which a central bank affects the amount of money in circulation

if a banking crisis occurs, ECB can provide emergency liquidity assistance i.e. cheap emergency loans to banks running out of funds

1. sole issuer of the euro (print euro currency)2. regulator of the financial sector (credit unions, building societies etc.)3. official external reserves (manages on behalf of country - official holdings of gold, foreign currencies etc.)4. maintains price stability

1. borrowing is encouraged and saving is discouraged2. DIRT revenue decreases3. increased demand for houses4. economic growth is encouraged

any increase in general level of prices due to an increase in costs of production/costs of inputs faced by the employer