Exam 10: Aggregate Supply and Aggregate Demand

What is the difference between a recessionary gap and an inflationary gap?

-If the actual real GDP is less than potential real GDP, the economy is

Which of the following helps explain why the AD curve is downward sloping?

-In the above figure, the economy will be at full employment if the price level

One reason that the aggregate demand curve has a negative slope is because

In the short run, a supply shock that shifts the short- run aggregate supply curve leftward raises the price level and increases real GDP.

Wealth and substitution effects explain why the aggregate demand curve has a positive slope.

If taxes are increased, the AD curve

-In the above figure, the curve labeled A shifts rightward if

In the above figure, when the economy is in a long- run equilibrium, the price level will be

Which of the following shifts both the LAS and SAS curves?

-In the above figure, curve A is the curve, curve B is the curve, and curve C is the Curve.

The quantity of real GDP supplied at different price levels is reflected by the

If there is an increase in technology, the long- run aggregate supply curve shifts rightward, but the short- run aggregate supply curve does not shift.

The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. In short- run equilibrium, there is .

-The data in the above table show that when the price level is 120,

When the prices of U.S.- produced goods rise and the price of foreign- produced goods do not change, the result is

-The data in the above table show that when the price level is 120, if aggregate demand does not change then the

-The data in the above table indicate that when the price level is 100,

In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result, Ireland's