Chapter 8 true false

Principles of Macroeconomics: A Study Guide

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Chapter 8: Aggregate Expenditure and Equilibrium Output True or False
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1. Consumption is a highly volatile component of aggregate expenditure. TRUE FALSE 2. The marginal propensity to consume is the slope of the aggregate expenditure function ( C + I ). TRUE FALSE 3. An increase in income causes an upward shift of the consumption function. TRUE FALSE
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4. The term autonomous planned investment means that changes in income have no impact on the level of planned investment expenditures. TRUE FALSE 5. The multiplier is a concept used to describe the impact of a change in autonomous expenditures on equilibrium income. TRUE FALSE 6. When aggregate expenditure is greater than aggregate income, unplanned investment
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Unformatted text preview: is positive, and firms will plan to decrease production in the next period. TRUE FALSE 7. The sum of planned investment plus unplanned investment always equals saving. TRUE FALSE 8. The larger the marginal propensity to consume, the smaller the resulting multiplier. TRUE FALSE 9. Our analysis of production and spending assumes that firms do not have complete control over their investment decisions, but households have complete control over their consumption decisions. TRUE FALSE 10. Our analysis of production and spending assumes that firms have more control over inventory investment than over physical investment. TRUE FALSE...
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This homework help was uploaded on 02/01/2008 for the course EBGN 312 taught by Professor Sosa during the Fall '02 term at Mines.

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Chapter 8 true false - is positive, and firms will plan to...

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