In the Keynesian aggregate expenditure model, the equilibrium level of income is achieved when
a. actual saving equals actual investment.
b. planned aggregate expenditures equal total output.
c. consumption equals income times the marginal propensity to consume.
d. the marginal propensity to consume equals planned output.
B
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Which of the following statements is true?
A) In the United States, the unemployment rate among bachelor degree holders is more than the unemployment rate among high school diploma holders. B) Unemployment rate is higher among groups with lower educational attainment. C) More educated workers have a lower opportunity cost of time than less educated workers. D) The unemployment rate in a country normally increases when the country's economy expands.
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.90 . A decrease in government spending of $1 billion would result in a decrease in GDP of:
a. $0. b. $0.9 billion. c. $1.0 billion. d. $9.0 billion. e. $10.0 billion.