Econ Test 2

The economic expansion began in 1991 lasted

What would a rightward shift of the labor demand curve indicate?

Which of the following could explain a leftward shift of the labor demand curve?
a) firms are unable to sell all output they produce
b) workers have become less productive
c) workers have become more productive

In the classical model, an increase in the demand for labor (shift in the demand curve) will

According to textbook, the classical model does a poor job of explaining the __________ because it assumes that the ________ always clears

Which of the following does not influence consumption spending?
-imports
-diasposable income
-taxes
-wealth

Suppose each of the following items appears on the evening news, which one would cause consumption spending to increase?
-Layoffs Record High
-Gov't to increase Taxes next quarter
-Stock Market Drops
-Government to Issue Tax Rebates at the end of the month

The marginal propensity to consume is always

Which of the following would cause the AE line to shift downward?
-decrease in taxes
-decrease in interest rates
-consumers become more pessimistic about future

If MPC is .8 and disposable income shrinks by 100 mil consumption would

The slope of the consumption-income line is also known as

An increase in income cause _______ AE line

A decrease in taxes causes __________AE line

An increase in the interest rate cause_________AE line

In the short run macro model planned investment is defined as