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6 Written questions

6 Multiple choice questions

  1. Operating costs
    Business taxes
    Technological changes
    Stock of capital goods
    Planned inventory changes
  2. the ratio of a change in GDP to the initial change in spending. 1/1-MPC or 1/MPS
  3. real-balances effect
    interest rate effect
    foreign purchases effect
  4. input prices
  5. Change in consumption/Disposable income
  6. Wealth
    Real interest rates

5 True/False questions

  1. Average Propensity to ConsumeConsumption/Disposable income


  2. 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


  3. nondiscretionary or built-in stabilization policythe change in government expenditures or taxes which occurs automatically as a result of existing laws


  4. Expansionary fiscal policyincreases in government spending or decreases in taxes or both, so that the net effect on aggregate demand is an increase in net government spending


  5. Cost-push inflationleftward shift in the AS curve