NAME: ________________________

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6 Written Questions

6 Multiple Choice Questions

  1. deliberate manipulation of taxes and government spending by the Congress to alter real domestic output and employment, to control inflation, and to stimulate economic growth during a particular period of time
  2. Change in consumption/Disposable income
  3. the change in government expenditures or taxes which occurs automatically as a result of existing laws
  4. What we spend on goods and services.
  5. input prices
  6. Change in savings/Disposable income

5 True/False Questions

  1. Cost-push inflationWhat we spend on goods and services.


  2. Average Propensity to ConsumeConsumption/Disposable income


  3. Causes of shifts in the consumption curveOperating costs
    Business taxes
    Technological changes
    Stock of capital goods
    Planned inventory changes


  4. Contractionary fiscal policyan increase in taxes or decrease in government spending or both, so that the net effect on aggregate demand is a decrease in net government spending


  5. Instability of investmentthe ratio of a change in GDP to the initial change in spending. 1/1-MPC or 1/MPS


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