Chapter 9 – The Aggregate Expenditures Model

Question 0

Aggregate expenditures

Answer 0

The total amount spent for final goods and services in an economy

Question 1

Closed economy

Answer 1

And economy that neither exports nor imports goods and services.

Question 2

Planned investment

Answer 2

The amount that firms plan or intent to invest

Question 3

Investment schedule

Answer 3

A curve or schedule that shows the amounts friends plan to invest at various possible values of real GDP

Question 4

Private sector

Answer 4

The households and business firms of the economy

Question 5

Aggregate expenditure schedule

Answer 5

Schedule or curve that shows the total amount spent for final goods and services at different levels of GDP

Question 6

Equilibrium GDP

Answer 6

The level at which the total quantity of goods produced equals the total quantity of goods purchased

Question 7

Leakage

Answer 7

A withdrawal of potential spending from the income and expenditures streamed via saving, tax payments, or imports

Question 8

Injection

Answer 8

And addition of spending to the income expenditures stream

Question 9

Unplanned changes in inventory

Answer 9

Changes in inventory that firms did not anticipate

Question 10

Actual investment

Answer 10

The amounts that firms doing best; equal to planned investment plus unplanned investment

Question 11

Unplanned investment

Answer 11

Actual investment less planned investment; increases or decreases in the inventories of firms resulting from production greater than sales

Question 12

Open economy

Answer 12

An economy that exports and imports goods and services

Question 13

Marginal propensity to import or MPM

Answer 13

The fraction or percentage of any change in GDP spend for imported goods and services

Question 14

International value of the dollar

Answer 14

The price that must be paid in foreign currency to obtain one Canadian dollar

Question 15

Devaluation

Answer 15

A decrease in the governmental defined value of a currency

Question 16

Public-sector

Answer 16

The part of me can’t to me that contains all government entities; government

Question 17

Lump sum tax

Answer 17

Attacks that you’ll do the same amount of tax revenue at all levels of GDP

Question 18

Recessionary expenditure gap

Answer 18

The amount by which aggregate expenditures fall short of those required to achieve full employment GDP

Question 19

Inflationary expenditure gap

Answer 19

The amount by which aggregate expenditures exceed those required to achieve full employment GDP

Question 20

Say’s Law

Answer 20

The largely discredited macro economic generalization that the production of goods and services creates an equal demand for these goods and services