TO-Eco2013-Chap13 - ! Numerically and graphically show how...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Objectives ! Explain the two key assumptions of the basic Keynesian model ! Define menu costs and discuss how they affect the decision to change prices ! Identify the contributions of John Maynard Keynes to economics ! Define planned aggregate expenditures ! Identify the components of planned aggregate expenditures ! Explain why planned spending may differ from actual spending ! Define autonomous and induced aggregate demand ! Define the consumption function and MPC ! Identify and define short-run equilibrium output
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ! Numerically and graphically show how a decline in spending can cause a recessionary gap ! Define the income-expenditure multiplier ! Calculate the multiplier in the basic Keynesian model ! Define stabilization policy and automatic stabilizers ! Discuss the use of fiscal policy to stabilize aggregate demand ! Calculate the effects of government purchases, transfer payments and taxes on short-run equilibrium output ! Discuss the three qualifications to the use of fiscal policy as a stabilization tool...
View Full Document

Ask a homework question - tutors are online