宏观经济学课后习题答案：Ch 23Output and Expenditure.pdf

CHAPTER 23 Output and Expenditure in the Short Run 1. Chapter Summary 2. Learning Objectives 3. Chapter Outline Teaching Tips/Topics for Discussion 4. Solved Problems 5. Solutions to Review Questions and Problems and Applications 1. Chapter Summary The business cycle involves the interaction of many economic variables. It is essential to understan how macroeconomic equilibrium is determine in the aggregate expenditure model. The aggregate expenditure model focuses on the relationship between total spending and real GDP in the short run, assuming the price level is constant. In any particular year, the level of GDP is determined by the level of total spending, or aggregate expenditure, in the economy. The four components of aggregate expenditure are consumption (C), planne investment (I), government purchases (G), an net exports (NX). When aggregate expenditure is greater than GDP, there is an unplanned decrease in inventories, an GDP an total employment will increase. When aggregate expenditure is less than GDP, there is an unplanne increase in inventories, an GDP an total employment will decline. When aggregate expenditure is equal to GDP, firms will sell what they expected to sell, production and employment will be unchanged, and the economy will be in macroeconomic equilibrium. The five determinants of consumption are current disposable income, household wealth, expecte future income, the price level, and the interest rate. The consumption function is the relationship between consumption a