Economics 1022A/B Study Guide - Midterm Guide: Excess Reserves, Loanable Funds, Open Market Operation

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: All

Document Summary

Mid-term test #2 review test march 12, 2016. Drinks, food, pencil cases, calculator cases, the plastic wallet holding your student card and cell phones are not allowed. The possession of a cell phone at your desk may be considered an attempt to cheat and will be dealt with accordingly. Sheet you may keep your question paper. This figure describes the relationship between consumption expenditure and disposable income for a model economy. A-2: if aggregate planned expenditure exceeds real gdp, then inventories, decrease and real gdp decreases, increase and real gdp falls, decrease and real gdp increases, increase and real gdp increases, remain constant and real gdp remains constant. The economy depicted does not engage in international trade and has no government. Planned aggregate expenditure (ae) is equal to the sum of consumption expenditure (c) and investment (i): refer to figure 2. The economy shown in the graph does not engage in international trade and has no government.