AP Macroeconomics Unit 3 Review

An increase in corporate taxes would cause

Knowing the MPC and MPS allows you to predict the size of

The formula for MPC is

The higher the MPC, the bigger the

What is the most accurate way to compare the GDP of different countries?

The formula for the MPS is

If the MPC is .5 & the spending multiplier is 2, the tax multiplier would be

If the MPS = .5, $8 million in new spending would cause

Which of these is worse for the economy?

A dangerous effect of a decrease in aggregate demand is

Inflation becomes hyperinflation when it reaches

If the tax multiplier is 4, a $10 million increase in taxes would cause

If any type of spending increases there will be

A decrease in the interest rate would cause

An increase in aggregate supply will

Who is helped by inflation?

The government spends $100 million to replace lead water pipes in schools causing

How is inflation measured?

If consumers tend to spend $300 out of every $400 of income, the MPS is

When will the aggregate supply curve be vertical?

What type of inflation is associated with "stagflation"?

Disposable income is equal to

What relationship do interest rates have to investment demand?

The tax multiplier is always smaller than the spending multiplier because

The multiple that GDP increases from any new spending is the

Imports rise and exports decrease causing

Drawing a vertical line from macroeconomic equilibrium to the X axis shows

New regulations on the amount of C02 that can be put into the atmosphere would cause

The point where the aggregate supply and aggregate demand curves intersect is

Exports minus imports is

Unemployment caused by layoffs during the Great Depression would be

Drawing a horizontal line from macroeconomic equilibrium to the Y axis helps predict

An increase in consumer personal income taxes would cause

If new government spending of $5 million causes $25 million in economic growth

The formula for the spending multiplier is

Economic forecasts improve causing an increase in investment spending and

Oil increases in price causing

Who is hurt by inflation?

If production generally becomes easier / cheaper there will be

A general decrease in the price level is

What does the output-expenditure model measure to predict GDP?

If the MPC is .9, the spending multiplier will be

The output-expenditure model of GDP is

The year used as a point of comparison for statistics such as real GDP is

Which of these would be counted toward GDP?

The spending multiplier can also be found using the formula

A decrease in aggregate demand will

What type of worker is most vulnerable to technological unemployment?

The GDP gap is caused by

How can GDP be increased?

If the MPC = .64, the MPS=