Full 104 page summary of Monetary Economics (ECS3701) Module(Distinction)2023

The most important determinant of consumer spending is - -The level of Income -Compare the effect of a discretionary cut in taxes of $ 40 billion on the economy when the economy's marginal propensity to consume is 0.9 with the effect of a discretionary increase in government spending of $36 billion: which policy has a bigger impact, expansion, on the economy if the economy is operating in the horizontal range of its aggregate supply curve and there are no complications to this fiscal policy? - -Both are the same -The consumption schedule is such that - -the MPA is constant and the APC declines as income rises. -The multiplier effect means that - -an increase in investment can cause GDP to change by a larger amount -If 100 percent of any change in income is spent, the multiplier will be - -infinitely large -The aggregate demand curve - -shows the amount of real output that will be purchased at each possible price level. -The aggregate supply curve (short -run) is unsleeping because - -per-unit production costs rise as the economy moves toward and beyond its full-employment real output -Fiscal policy is carried out primarily by - -The Federal government -Expansionary fiscal policy is so named because it - -is designed to expand real GDP -An economist who favors smaller government would recommend - -tax cuts during recession and reductions is government spending during inflation