Chapters 11 and 12 - 1022

Deflation can be ended by increasing the quantity of money.

• TRUE

• FALSE

What is the amount of autonomous consumption expenditure in billions of 2012 dollars?

If autonomous consumption is 300 billions (of 2012 dollars), what is the consumption function?

• C=300+0.75YD

• C=0.75YD

• C=0.25YD

• C=YD

An economy has a consumption function of C = 5 + 0.6Y, investment equal to 5, government expenditure equal to 5, exports equal to 5, and an import function of M = 0.1Y.

What is the equilibrium real GDP in this economy?

An economy has a consumption function of C = 5 + 0.6Y, investment equal to 5, government expenditure equal to 5, exports equal to 5, and an import function of M = 0.1Y. What is the economy's multiplier?

A cost-push inflation begins with ---- as the result of an increase in the money wage rate or an increase in the money prices of raw materials.

• A decrease in aggregate demand

• An increase in short-run aggregate supply

• A decrease in short-run aggregate supply

• An increase in aggregate demand

A demand-pull inflation begins with:

• An increase in the money wage rate

• A decrease in aggregate demand

• An increase in aggregate demand

   Matching the graphs with the concepts

• Cost-push inflation spiral

• 
• Demand-pull inflation spiral

• 
• Expected inflation repeats

•