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WorksheetsAP Macro Aggregate Expenditures Model
Total questions: 12
Worksheet time: 6mins
Businesses will only produce...
What they are absolutely sure they will profit on
What they think can sell at a profit
What the consumers have a shortage of
Whatever will appeal to the young folks
Which is the equation used to find the equilibrium GDP?
C+Ig=GDP
G+D+P=GDP
C-Ig=GDP
C-Ig=GPD
Which one is a constant in the aggregate expenditure function?
Consumption
Investment
GDP
None of the above
When aggregate expenditures rise, total output and employment...
increase
decrease
stay constant
rise and fall
What does an investment schedule graph look like?
Aggregate expenditures is to GDP as planned investment is to _______.
disequilibrium
GDP
consumption
saving
What effect does investment have on the income-expenditures stream?
Injections of spending increase total output.
These leakages decrease total output.
Investment is constant so it doesn't matter.
What effect does saving have on income-expenditures?
Saving increases total output because of inflation.
Saving is a leakage or withdrawal that decreases total output
Money that is saved isn't used so it doesn't have an effect
In total spending, investment often replaces losses that were due to...
wars
Blair Walsh
unplanned changes in inventories
saving
Why is the line at an angle of 45 degrees?
It's easy that way
Because at any point on the line, the x and y values are equal
Because $45,000,000 divided by $1,000,0000 equals 45
Because it means that at any point on the line, GDP is greater than aggregate expenditures.
In the graph above, the slope of the aggregate expenditure schedule:
Is constant and equals the MPS
Is constant and equals the MPC
Increases as real GDP increases
Increases as real GDP decreases
