When price level decrease. This happens to output.
What is output increases. (movement along the curve)
100
The LRAS Curve is this kind of line and does not move.
What is a vertical line?
100
Inflation is a general increase in this...
What is price level?
100
Our components of Aggregate Expenditures.
What are Consumption, government spending, investment spending, and net exports.
100
Change in GDP/change in consumption
What is MPC?
200
Consumer wealth will cause demand to shift this way.
What is right?
200
Oil prices decrease.
What is SRAS shifts right.
200
When our SRAS/AD curve is before the LRAS.
What is recession?
200
Our leakages of GDP
What are taxes and savings?
200
The consumption multiplier formula.
What is 1/(1-MPC)
300
Wages increase across the entire economy.
What is AD shifts right.
300
Wages increase across the entire economy.
What is SRAS decreases?
300
Government attempts to get us out of recessionary or inflationary periods.
What is fiscal policy?
300
When AE and GDP(Y) are equal.
What is Keynesian Equilibrium.
300
A 500 billion dollar increase in government spending leads to this new equilibrium GDP. Our MPC is .5.
What is 1 trillion dollars.
400
This economic situation occurs when AD shifts right. (one of our four economic situations)
What is Hyperinflation?
400
When our SRAS curve shifts rightward we get closer to this economic state.
What is cybernation?
400
Examples include government spending and tax cuts.
What is expansionary fiscal policy.
400
When our leakages and our injections to GDP our equal.
What is Keynesian Equilibrium?
400
The formula for the savings multiplier.
What is 1/MPS
500
A severe sustained increase in oil prices would most likely cause short-run and long-run aggregate supply curves and the production possibilities curve to change in which of the following ways? (partial credit for this).
What is SRAS shifts right. LRAS never moves. PPC does not shift.
500
When our SRAS curve shifts leftward. Our economy gets closer to this economic state.
What is Stagflation?
500
Examples include tax hikes and government cutbacks.
What is contractionary fiscal policy?
500
The difference between AE and GDP
What is planned spending?
500
In the Keynesian aggregate expenditure model, if the MPC is 0.75 and gross investment increases by $6 billion, equilibrium GDP will increase by…