MACRO chapter 11
A decline in autonomous spending shifts the line down main to a recessionary hole because -
ANS-output is now under capacity
A lower in planned investment consequences in a - ANS-recessionary hole
A financial policy motion to close a recessionary gap is to - ANS-increase authorities purchases
also can boom switch payments
A financial coverage movement to shut and expansionary gap is to - ANS-lower authorities
purchases
Aggregate Expenditure Format
(Total Equation) - ANS-.75y+290
An monetary expansion inside the US _______ the demand for exports from Canada ensuing in
a reduction in Canadian self sustaining costs and a _______ gap in Canada. - ANS-reduces,
recessionary
An financial expansion inside the US _______ the demand for exports in Mexico ensuing in an
growth in Mexican autonomous costs and an _________ output hole in Mexico. - ANS-will
increase, expansionary
As disposable profits will increase - ANS-intake increases
Autonomous Expenditure Format - ANS-290
Basic Keynesian Model - ANS-the assumption that companies meet the demand for their
products at preset expenses
Bush and Obama - ANS-Bush- 2/3 tax cuts, 1/3 spending boom
Obama- 1/four tax cuts, 3/four spending boom
** CBO observed that both worked
Changes in government purchases affect planned spending - ANS-at once, through converting
independent costs
Changes in taxes and transfers affect deliberate spending - ANS-circuitously, by way of
changing disposable earnings and therefore, consumption
, Consumption relies upon on - ANS-disposable profits and elements other than disposable
earnings
Consumption characteristic is the connection among - ANS-intake and its determinants, such as
disposable earnings
Contractionary rules are government stabilization policy movements intend to - ANS-lower
deliberate spending
Cost-Benefit Principle - ANS-the selection whether to to alternate prices frequency or every so
often
expenses need to be modified if the advantage of doing so outweighs the price of making the
adjustments
Drawback of economic coverage as a stabilization policy is that - ANS-it affects capacity output
and PAE, additionally no longer bendy enough
For an economy starting at potential output, a lower in self sustaining expenditure in the
short-run results in a - ANS-recessionary gap
Four Components of PAE - ANS-intake, deliberate investment, authorities purchases, internet
exports
would not include hobby paid on national debt
Government Policies which might be used to affect PAE, with the goal of putting off output gaps
are referred to as - ANS-stabilization policies
Historically speaking, a one greenback decrease in family wealth will purpose customer
spending to fall through - ANS-0.03-0.07
If a corporation sells much less output than anticipated, deliberate funding is - ANS-much less
than real funding
If a firm sells less than predicted, real funding will increase due to the fact - ANS-the unsold
items are added to the stock (counted as an funding)
If a company sells more output than anticipated, planned investment is - ANS-extra than real
investment
If short run equilibrium = 20,000 and ability output = 25,000, then this financial system has a -
ANS-recessionary hole, and may be closed via increasing government purchases
A decline in autonomous spending shifts the line down main to a recessionary hole because -
ANS-output is now under capacity
A lower in planned investment consequences in a - ANS-recessionary hole
A financial policy motion to close a recessionary gap is to - ANS-increase authorities purchases
also can boom switch payments
A financial coverage movement to shut and expansionary gap is to - ANS-lower authorities
purchases
Aggregate Expenditure Format
(Total Equation) - ANS-.75y+290
An monetary expansion inside the US _______ the demand for exports from Canada ensuing in
a reduction in Canadian self sustaining costs and a _______ gap in Canada. - ANS-reduces,
recessionary
An financial expansion inside the US _______ the demand for exports in Mexico ensuing in an
growth in Mexican autonomous costs and an _________ output hole in Mexico. - ANS-will
increase, expansionary
As disposable profits will increase - ANS-intake increases
Autonomous Expenditure Format - ANS-290
Basic Keynesian Model - ANS-the assumption that companies meet the demand for their
products at preset expenses
Bush and Obama - ANS-Bush- 2/3 tax cuts, 1/3 spending boom
Obama- 1/four tax cuts, 3/four spending boom
** CBO observed that both worked
Changes in government purchases affect planned spending - ANS-at once, through converting
independent costs
Changes in taxes and transfers affect deliberate spending - ANS-circuitously, by way of
changing disposable earnings and therefore, consumption
, Consumption relies upon on - ANS-disposable profits and elements other than disposable
earnings
Consumption characteristic is the connection among - ANS-intake and its determinants, such as
disposable earnings
Contractionary rules are government stabilization policy movements intend to - ANS-lower
deliberate spending
Cost-Benefit Principle - ANS-the selection whether to to alternate prices frequency or every so
often
expenses need to be modified if the advantage of doing so outweighs the price of making the
adjustments
Drawback of economic coverage as a stabilization policy is that - ANS-it affects capacity output
and PAE, additionally no longer bendy enough
For an economy starting at potential output, a lower in self sustaining expenditure in the
short-run results in a - ANS-recessionary gap
Four Components of PAE - ANS-intake, deliberate investment, authorities purchases, internet
exports
would not include hobby paid on national debt
Government Policies which might be used to affect PAE, with the goal of putting off output gaps
are referred to as - ANS-stabilization policies
Historically speaking, a one greenback decrease in family wealth will purpose customer
spending to fall through - ANS-0.03-0.07
If a corporation sells much less output than anticipated, deliberate funding is - ANS-much less
than real funding
If a firm sells less than predicted, real funding will increase due to the fact - ANS-the unsold
items are added to the stock (counted as an funding)
If a company sells more output than anticipated, planned investment is - ANS-extra than real
investment
If short run equilibrium = 20,000 and ability output = 25,000, then this financial system has a -
ANS-recessionary hole, and may be closed via increasing government purchases
