Exam 9: Aggregate Demand and Aggregate Supply

Suppose there are three economies with 3 different consumption functions: Country A: C = 100 + 0.8Y Country B: C = 200 + 0.75 Y Country C: C = 75 + 0.9Y In which of these countries is autonomous consumption the largest?

In the long run, the aggregate supply curve is:

Figure 9.3 -Refer to Figure 9.3. Which of the following causes the economy to move from Point A to Point E in the short run?

In the short run, the formal or informal contracts between firms mean that changes in demand will be reflected primarily in changes in _______ .

A large reduction in oil prices will cause:

The aggregate demand curve shifts to the left if:

Rank these three wage rates in the order of least sticky to most sticky: minimum wage workers, nurses, movie stars.

A lower U.S. net exports caused by a higher U.S. price level will cause:

According to the international effect explanation of the downward slope of the AD curve, a higher price level in the U.S. economy causes:

Auction prices are prices that adjust _______ while custom prices are prices that adjust _______ .

The aggregate demand curve is downward sloping because of the law of demand.

The four components of the aggregate demand curve are the same as the:

Explain the wealth effect on aggregate demand. Using the wealth effect, summarize how the GDP changes after an increase in the price level.

If the economy is in equilibrium at full employment, a decrease in aggregate demand will:

If the marginal propensity to consume is 0.8, the value of the marginal propensity to save is:

Recall Application 1, "Measuring Price Stickiness in Consumer Markets," to answer the following questions: -Based on what you learned from the application, coin- operated laundry prices behave as:

Steel rod prices are an example of:

Why is the long- run aggregate supply curve vertical?

Figure 9.1 -Refer to Figure 9.1. When the price level rises and causes lower consumption expenditures, it is illustrated as:

Recall Application 3, "How the U.S. Economy has Coped with Oil Price Fluctuations," to answer the following questions: -According to the application, the changes in the price of oil between 1997 and 1998 were examples of _______, while the changes in the price of oil in the early 1970s were examples of _______.