Answered: Match the each term with the correct…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Match the following terms ( terms are labeled 1-10 )to the correct definition(definitions are labeled a through J) aggregate consumption function, multiplier, planned aggregate expenditure (PAE), income-expenditure equlibrium GDP, marginal propensity to consume (MPC), consumption function, unplanned inventory investment, actual investment spending,inventory, autonomous spending A) The amount by which consumption rises when disposable income rise by one dollar marginal propensity to consume (MPC) B) The level of output (real GDP) at which output (real GDP) equals planned aggregate expenditure. income-expenditure equlibrium GDP C) The ratio of total change in real GDP caused by an autonomous change in aggregate spending. multiplier D) Total planned spending on final goods and services in the economy. aggregate consumption function E) The equation showing how individual household's consumer spending varies with its current disposable income. consumption function F) Consumption spending that is not related to the level of disposable income. autonomous spending G) Unintended change in inventories occuring when actual sales are higher or lower than expected sales. unplanned inventory investment H) Planned investment spending plus unplanned inventory investment. actual investment spending I) The relationship for the whole economy between agreegate current disposable income and aggregate consumer spending. planned aggregate expenditure (PAE) J) The stocks of goods held to satisfy future sales inventory 1. aggregate consumption function 2. multiplier 3. planned aggregate expenditure (PAE) 4. income-expenditure equlibrium GDP 5. marginal propensity to consume (MPC) 6. consumption function 7. unplanned inventory investment 8. actual investment spending 9. inventory 10. autonomous spending

Match the each term with the correct definition:
a. The amount by which consumption rises when disposable income rise by one dollar.
b. The level of output (real GDP) at which output (real GDP) equals planned aggregate expenditure.
c. The ratio of total change in real GDP caused by an autonomous change in aggregate spending.
d. Total planned spending on final goods and services in the economy.
=
e. The equation showing how individual household's consumer spending varies with its current disposable income.
f. Consumption spending that is not related to the level of disposable income.
g. Unintended change in inventories occuring when actual sales are higher or lower than expected sales.
h. Planned investment spending plus unplanned inventory investment.
i. The relationship for the whole economy between agreegate current disposable income and aggregate consumer
spending.
j. The stocks of goods held to satisfy future sales.

aggregate consumption
C
function
Є
multiplier
f.
planned aggregate
expenditure (PAE)
income-expenditure
equlibrium GDP
marginal propensity to
id
se
to
ng
r
consume (MPC)
nn
i.
consumption function
et
S
unplanned inventory
investment
actual investment
spending
inventory
autonomous spending
sa

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