CanL1
1
The sum of planned consumption expenditure, planned investment, planned government expenditures, and planned net exports is ________________.
aggregate planned expenditure
real GDP
aggregate expenditure
the expenditure approach to real GDP
2
The consumption function is the relationship between consumption expenditure and ___________________, other things remaining the same.
saving
potential GDP
disposable income
the 45 degree line
3
The marginal propensity to consume ____________________.
is the fraction of GDP consumed
is the fraction of disposable income consumed
plus the marginal propensity to save equals 1
is the amount of disposable income consumed
4
The marginal propensity to save is _____________.
equal to the slope of the saving function
equal to the inverse of the marginal propensity to consume
equal to 1 plus the slope of the consumption function
always greater than the marginal propensity to consume
5
The marginal propensity to import is _______ that is spent on imports.
the fraction of an increase in potential GDP
the amount of real GDP
the fraction of an increase in real GDP
the amount of potential GDP
6
The part of aggregate planned expenditure that does not vary with real GDP _______________.
equals equilibrium expenditure
is induced expenditure
is autonomous expenditure
equals zero
7
Induced expenditure includes ______________________.
induced consumption and government expenditures
autonomous expenditure
induced consumption expenditure minus imports
induced consumption expenditure plus imports
8
All of the following statements about equilibrium expenditure are true except:
Unplanned inventory investment is zero.
Actual investment is less than planned investment.
Aggregate planned expenditure equals real GDP.
Aggregate planned expenditure equals actual expenditure.
9
The multiplier is the amount by which ____________________ is multiplied to determine __________________.
induced expenditure; real GDP
the change in induced expenditure; the change in potential GDP
the change in autonomous expenditure; the change in real GDP
autonomous expenditure; real GDP
10
The multiplier is greater than 1 because the change in autonomous expenditure leads to ______________.
less consumption expenditure
more induced expenditure
more saving
more investment
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