Question

10) In the Keynesian cross diagram, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant.               10) _____

A) rise; right     B) fall; right      C) fall; left         D) rise; left

11) In the Keynesian cross diagram, an increase in autonomous consumer expenditure causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant.                                                            11) _____

A) down; rise    B) down; fall     C) up; rise         D) up; fall

12) In the Keynesian cross diagram, an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift up, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant.                                                                       12) _____

A) fall; right      B) rise; left        C) rise; right     D) fall; left

Answer 1

10. In the Keynesian cross diagram,an increase in autonomous consumer Expenditure causes the aggregate demand function to shift up, the equilibrium level of aggregate output to rise and the IS curve to shift to the right everything else held constant

11) in the Keynesian cross diagram, an increase in autonomous consumer Expenditure causes the aggregate demand function to shift down and the Equilibrium level of aggregate output to rise everything else held constant.

12) in the Keynesian cross diagram,an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift up ,the Equilibrium level of aggregate output to rise and the IS curve to shift to the right everything else held constant.