The change in consumption divided by the change in income is
What is Marginal Propensity to Consume
100
Supply creates its own demand according to _________
What is Says Law
100
What are the determinants of aggregate demand
What is C, I, G, Xn
100
Which fiscal policy would you prescribe to eliminate an inflationary gap?
What is a contractionary fiscal policy
100
Every choice results in a foregone best alternative, which economists call the
What is opportunity cost
200
A change in a component of total spending leads to a larger change in GDP is called
What is the Multiplier Effect
200
According to ____________ economists wages fluctuate downward, prices are flexible, and the government should not interfere with the economy
What is Classical
200
An increase in labor supply will shift (AD or AS) to (right or left)
What is AS to the right
200
If the economy is in a severe recession, which 2 fiscal policies would be most effective in stimulating production
What is increasing government spending and decreasing taxes
200
What group of people would benefit from unanticipated inflation
Who is borrowers
300
MPS=
Change in saving/Change in income
300
According to Keynesian theory, decreasing taxes and increasing government spending will most likely change consumption expenditures and unemployment in the following ways?
What is Increase Consumption and Decrease Unemployment
300
when government spending exceeds tax collections for a given period it creates a
What is budget deficit
300
What are the three problems of timing in regards to fiscal policy?
What is Recognition lag, Administrative lag, Operational lag
300
Inflation in excess of 50 percent per year is called
What is hyperinflation
400
How do you calculate the Multiplier?
What is 1/MPS or 1/1-MPC
400
According to Keynesian theory, the most important determinant of savings and consumption is the
What is level of income
400
The _____________________ curve is the relationship between the price level and real domestic output purchased
What is aggregate demand
400
What does CEA stand for?
What is Council of Economic Advisors
400
What kind of unemployment is it called if you are replaced by a computer program or a robot
What is structurally employed
500
If the MPC is .75, the multiplier will be:
What is 4
500
The part that Keynes most disagreed with in Classical economics is:
What is that a market economy is self-correcting and thus will eventually recover from recession without intervention
500
the nominal interest rate minus anticipated inflation equals
What is real interest rate
500
A decrease in investment stemming from higher interest rates due to government purchases in most commonly called
What is crowding out
500
The change over time of the weighted prices of a particular group of goods and services