1. What is the marginal propensity to consume?

2. What are the components on which the aggregate expenditure function is based?

3. What does it mean when the aggregate expenditure line crosses the 45-degree line? In other words, how would you explain the intersection in words?

4. Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long-term impacts of such policies on the economy?

5. Does it make sense that wages would be sticky downwards but not upwards? Why or why not?