CHAPTER 28
Description: ECON
Complete list of Terms and Definitions for CHAPTER 28
| Terms | Definitions |
|---|---|
| Investment schedule upward. | 1. All else equal, a large decline in the real interest rate will shift the: |
| Is an investment demand curve and curve B is an investment schedule. | 2. Refer to the above diagrams. Curve A: |
| Curve A shifts to the right. | 3. Refer to the above diagrams. Other things equal, curve B will shift upward when: |
| Leave curve A in place but shift curve B upward. | 4. Refer to the above diagrams. Other things equal, an interest rate decrease will: |
| Shift curve B upward. | 5. Refer to the above diagram. Other things equal, an interest rate reduction coupled with a rightward shift in curve A will: |
| Interest rate together with the location of curve A. | 6. Refer to the above diagram. The location of curve B depends on the: |
| $360 | 7. Refer to the above data. If gross investment is $12 billion, the equilibrium level of GDP will be: |
| $300 | 8. Refer to the above diagram for a private closed economy. The equilibrium level of GDP is: |
| $50 | 9. Refer to the above diagram for a private closed economy. At the equilibrium level of GDP, investment and saving are both: |
| Saving | 10. Imports have the same effect on the current size of GDP as: |
| Investment | 11. exports have the same effect on the current size of GDP |
| Net exports may be either positive or negative. | 12. At the equilibrium GDP for an open economy: |
| U.S. GDP will fall. | 13. Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S. GDP: |
| Increase by more than $100 billion. | 14. Other things equal, if $100 billion of government purchases (G) is added to private spending (C + Ig + Xn), GDP will: |
| Decrease by $50 billion. | 15. Suppose the economy's multiplier is 2. Other things equal, a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to: |
| $40 billion | 16. Assume the MPC is .8. If government were to impose $50 billion of new taxes on household income, consumption spending would decrease by: |
| Is downsloping because production costs decline as real output increases. | 17. The aggregate demand curve |
| Downsloping because of the interest-rate, real-balances, and foreign purchases effects. | 18. The aggregate demand curve is: |
| An increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. | 19. The interest-rate effect suggests that: |