Fill in the blanks to make the following statements correct. a. If actual national income is $200

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Fill in the blanks to make the following statements correct.

a. If actual national income is $200 billion and desired aggregate expenditure is $180 billion, inventories may begin to ________ , firms will ________ the level of output, and national income will ___________ .

b. If actual national income is $200 billion and desired aggregate expenditure is $214 billion, inventories may begin to __________ , firms will __________ the level of output, and national income will ____________ .

c. If households experience an increase in wealth that leads to an increase in desired consumption, the AE curve will shift __________ . Equilibrium national income will _________ to the level indicated by the intersection of the AE curve with the ___________ line.

d. When autonomous desired expenditure increases by $10 billion, national income will increase by __________than $10 billion. The magnitude of the change in national income is measured by the _____________ .

e. The larger is the marginal propensity to spend, the ____________ is the multiplier. Where z is the marginal propensity to spend, the multiplier is equal to _______________ .

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Macroeconomics

ISBN: 9780133910445

15th Edition

Authors: Christopher T S Ragan

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