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According to classical
economics, if market
demand increases, the:

market supply curve
ultimately decreases
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According to Keynesian economics,
the __________ sector is largely the
cause of business cycles, while the
__________ sector is primarily
responsible for stabilizing business
cycles
...


Based on the shape of
is matched by a
the classical aggregate
corresponding decrease
supply curve, a decrease
in resource prices
...


Contractionary fiscal
policy is designed to
reduce the __________
rate with a(n) __________
...


downward shift of the
A decrease in financial
aggregate
wealth causes a(n):
expenditures line
...


Equilibrium in Keynesian economics
is measured as the balance
between the sum of consumption
expenditures, investment
expenditures, government
purchases, and net exports and:

gross domestic
product
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Fiscal policy makes use
of __________ to control
__________
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If a consumption schedule has
income values of $0, $100, $200,
$300, and $400, with corresponding
consumption values of $150, $175,
$200, $225, and $250, then saving is
-$75 if income is:

If aggregate demand
decreases in the aggregate
market with a classical
aggregate supply curve, then:

$100
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The injection added to the
three-sector injectionsleakages model to derive the
four-sector model is(are):

exports
...


household,
consumers

In the three-sector
injections-leakages
model, the injection(s)
is(are):

investment and
government
purchases

Keynesian economics failed
to explain stagflation that
occurred during the 1970s
because it:

largely ignored the
supply side of the
economy
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The Keynesian
multiplier is the:
A macroeconomic theory based
on the idea that unrestricted
markets generate the aggregate
production needed to maintain
full employment is:

cumulatively reinforcing
interaction between
consumption and income that
amplifies changes in
autonomous expenditures
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downward shift of the
aggregate
expenditures line

The portion of each
additional dollar of
household income that is
used for saving is the:

marginal propensity
to saving
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The psychological law of
Keynesian economics is
illustrated if a $100 increase
in income results in a:

$10 increase in saving
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A table showing the relation
between consumption
expenditures and income is
termed the:

consumption
schedule

Theories that seek to
explain macroeconomic
phenomena:

tend to be conflicting
and controversial
...


An upward shift of the
consumption line can
be caused by a(n):

increase in consumer
confidence

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