AP Macro Unit 3

Expansionary Fiscal Policy is like the _____ on a car

These fiscal policies require NO NEW legislative action to take effect.

When spending exceeds revenue in one fiscal year, we have a ______.

What formula is this?

This economy is experiencing

If exports increase, Aggregate Demand will

If MPC is .9, the spending multiplier is

The spending multiplier is always _______ the tax multiplier

What does "aggregate" mean?

If the spending multiplier is 8, the tax multiplier is

Who would argue that government intervention is needed to repair the economy?

Many years of deficit spending added together increases the _____

What type of gap is this economy experiencing?

The _______ effect says that the purchasing power of money falls as price levels rise

If consumer spending increases, Aggregate Demand will

In which range of AS are output AND price level increasing?

When price levels rise, _______ American exports will be purchased, causing GDP to _____

What formula is this?

What are the two tools of fiscal policy?

In which range of AS is output increasing with price level remaining constant?

_____ is when government policies prevent consumers and businesses from spending or borrowing

When price level increases, interest rates have a tendency to

What type of gap is this economy experiencing?

An decrease in resource prices will cause aggregate supply to

One example of contractionary fiscal policy

In the long-run aggregate supply curve, output

Who says that the economy is self-correcting over time?

The ratchet effect says wages tend to move ____ but not _____

In short-run aggregate supply, resources prices and wages will

These fiscal policies require new legislative action to take effect.

If the black plague returns, what would be the result on AD?

"IRAP" are the shifters of

When price level increases, the amount of real GDP demanded will...