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Across 1. The Marginal Propensity to ______ is the fraction of each additional (marginal) dollar of disposable income spent on consumption 5. ________ spending is responsible for the smallest part of aggregate demand 6. An increase in the average level of prices of goods and services 8. The GDP ____ is often the difference between full-employment output & the amount of output demanded at current price levels 9. ________ spending is responsible for the largest part of aggregate demand 10. _______ ______ are payments to individuals for which no services are exchanged & are not included in government spending 11. The higher the _______, the greater the multitier effect 13. The price-output relationship at equilibrium may not satisfy our macroeconomics goals 15. _____ _____ is the use of government taxes and spending to alter undesirable macroeconomic outcomes 19. Automatic ________ are counter-cyclical but are not fiscal policy tools; they kick in automatically 21. Tax increases reduce disposable income & this _____ consumption 22. Tax hikes shift the aggregate demand curve to the _____ 25. ________ income = after-tax income of consumers 26. A _____ cut directly increases disposable income 28. The ______ is the number by which an initial change in aggregate spending will ultimately impact AD after the ripple of spending cycles have worked themselves out; _______ = 1/(1-MPC) or 1/MPS (___=same word) 29. Multiplier x ______ change in government spending = Total Change in Spending 30. _______ AD to close the GDP gap 31. The government borrows money to pay for ____ spending; does not print more money 32. The ______ is the total outstanding amount of US government obligations

Down 2. The use of the budget to manage aggregate demand implies that the budget will often by _______ 3. In Keynes’ view, an unbalanced budget is appropriate if macro conditions call for a deficit or a surplus—__________ Policy; contrast with automatic stabilizers 4. The focus of supply-side theory is to get more output by shifting the AS curve to the _____ 7. The inability of labor-force participants to find jobs 12. _______ refers to expenditures on (production of) new plant & equipment in a given time period, plus changes in business inventories 14. The Marginal Propensity to _____ is the fraction of each additional (marginal) dollar of disposable income not spent on consumption 16. Even if the macro equilibrium is optimal, it may be displaced by macro disturbances 17. MCC tends to ______ as income rises 18. MPS = Change in Saving / Change in _______ income 20. Four major components of aggregate demand: Consumption (C), _________ (I), Government spending (G), & Net exports (exports-imports) (X-IM) 23. Fiscal ______ = tax hikes or spending cute intended to reduce (shift) aggregate demand 24. Lack of ______ in GDP is the rate of real output (GDP) produced is lower than desired, even at full-employment 27. An increase in government spending results in increased _____ for some people