1 Chapter 9 – Keynesian Model in Action What is the purpose of the chapter? - ___________________________________________________________________ Why is government spending (G) an autonomous expenditure? ______________________________________________ __________________________________________________________________________________________________ Why is net exports (X-M) assumed to be negative? _________________________________________________________ The Aggregate Expenditures-Output Model In the Keynesian Model, where is the equilibrium level of GDP? ______________________________________________ __________________________________________________________________________________________________ What does Real GDP mean? _____________________________________________________________ What does aggregate expenditures mean? _______________________________________________________________ How do aggregate expenditures affect the economy? ______________________________________________________ __________________________________________________________________________________________________
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1 Chapter 9 – Keynesian Model in Action What is the purpose of the chapter? - ___________________________________________________________________ Why is government spending (G) an autonomous expenditure? ______________________________________________ __________________________________________________________________________________________________ Why is net exports (X-M) assumed to be negative? _________________________________________________________ The Aggregate Expenditures-Output Model In the Keynesian Model, where is the equilibrium level of GDP? ______________________________________________ __________________________________________________________________________________________________ What does Real GDP mean? _____________________________________________________________ What does aggregate expenditures mean? _______________________________________________________________ How do aggregate expenditures affect the economy? ______________________________________________________ __________________________________________________________________________________________________
2 Analysis of Keynesian Equilibrium
What causes a decrease in real GDP and employment? Why? ________________________________________________