What are the four components of aggregate expenditure that together equal GDP? Consumption, Savings, Taxes, Imports Wages, Rent, Interest, Profit Savings, Taxes, Imports, Exports Consumption, Planned investment, Government purchases, Net exports

Consumption, Planned investment, Government purchases, Net exports

When will actual investment equal planned investment? When consumption equals savings When government spending equals tax revenue When there is no unplanned change in inventories When GDP is greater than aggregate expenditure

When there is no unplanned change in inventories

Macroeconomic Models: Aggregate Expenditure Components and Economic Equilibrium

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Economics - Macroeconomics

michael1tekrzp Created by 10 mon ago

Cards in this deck(47)

What is the term for the total spending in the economy, which includes consumption, planned investment, government purchases, and net exports?

Which macroeconomic model focuses on the short-run relationship between total spending and real GDP, assuming a constant price level?

What are the four components of aggregate expenditure that together equal GDP?

What is the term for spending by households on goods and services, such as automobiles and haircuts?

What is the term for planned spending by firms on capital goods and by households and firms on new houses?

What is the term for spending by local, state, and federal governments on goods and services?

What is the term for spending by foreign firms and households on U.S. goods minus spending by U.S. firms and households on foreign goods?

What is the term for goods that have been produced but not yet sold?

When will actual investment equal planned investment?

What occurs when total spending equals total production, or GDP?

What happens to inventories and GDP when aggregate expenditure is greater than GDP?

What are government actions designed to affect the performance of the economy as a whole called?

What are the five most important variables that determine the level of consumption?

What is the term for the income remaining to households after paying personal income tax and receiving government transfer payments?

What is a household's wealth defined as?

When does current income explain current consumption well?

What does the price level measure in the economy?

What is the effect of a high interest rate on household saving and spending?

What is the nominal interest rate?

How is the real interest rate calculated?

What is the consumption function?

What does the marginal propensity to consume (MPC) represent?

How do national income and disposable income differ?

What is the equation for national income in terms of consumption, saving, and taxes?

What does the marginal propensity to save (MPS) indicate?

What are the four most important variables that determine the level of investment?

What is an important determinant of investment spending?

How does a higher real interest rate affect investment spending?

How do taxes affect investment spending?

What is cash flow in the context of a firm's finances?

What do total government purchases include?

What are the three most important variables that determine the level of net exports?

How does inflation in the U.S. relative to other countries affect exports and imports?

What happens to net exports when incomes rise faster in the U.S. than in other countries?

What is the effect of a rising U.S. dollar value on the price of U.S. products sold abroad?

What does the 45-degree line in a Keynesian cross diagram represent?

Where is planned aggregate expenditure equal to GDP on a 45-degree line diagram?

Where does macroeconomic equilibrium occur on the 45-degree line diagram?

How is a recession shown on the 45-degree line diagram?

What happens when planned aggregate expenditure is less than real GDP?

In a numerical example of macroeconomic equilibrium, what happens if planned aggregate expenditure is greater than GDP?

What is an expenditure that does not depend on the level of GDP called?

What is the multiplier in macroeconomics?

What is the multiplier effect?

What is the general formula for the multiplier?

How does a change in the price level affect aggregate expenditure?

What does the aggregate demand curve show?

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