Chapter 28: The Aggregate Expenditures Model

________- Withdrawal of spending from the economys circular flow of income and expenditures.

________- Addition of spending into the income- expenditures stream.

Saving is what causes consumption to be less than ________ or GDP.

The ________ will change in response to changes in either the investment schedule or the consumption schedule.

________- sum tax- A tax of a constant amount or, more precisely, a tax yielding the same amount of tax revenue at each level of GDP.

________ gap- The amount by which aggregate expenditures at the full- employment GDP fall short of those required to achieve the full employment GDP.

________ create domestic production, income, and employment for a nation.

Increases in public spending, like increases in private spending, shift the ________ schedule upward and produce a higher equilibrium GDP.

Aggregate expenditures schedule- Shows the amount that will be spent at each ________ or income level.

An investment schedule showing the amounts business firms collectively intend to invest at each possible level of GDP

Shows the amount of investment forthcoming at each level of GDP

Shows the amount that will be spent at each possible output or income level

That output whose production creates total spending just sufficient to purchase that output

Withdrawal of spending from the economys circular flow of income and expenditures

Addition of spending into the income-expenditures stream

A tax of a constant amount or, more precisely, a tax yielding the same amount of tax revenue at each level of GDP

The amount by which aggregate expenditures at the full-employment GDP fall short of those required to achieve the full employment GDP

The amount by which an economys aggregate expenditures at the full-employment GDP exceed those just necessary to achieve the full-employment level of GDP

An investment schedule showing the amounts business firms collectively intend to invest at each possible level of GDP

Shows the amount of investment forthcoming at each level of GDP

Shows the amount that will be spent at each possible output or income level

That output whose production creates total spending just sufficient to purchase that output

Withdrawal of spending from the economy’s circular flow of income and expenditures

Addition of spending into the income-expenditures stream

Exports - imports

A tax of a constant amount or, more precisely, a tax yielding the same amount of tax revenue at each level of GDP

The amount by which aggregate expenditures at the full-employment GDP fall short of those required to achieve the full employment GDP

The amount by which an economy’s aggregate expenditures at the full-employment GDP exceed those just necessary to achieve the full-employment level of GDP