Exam 24: Aggregate Demand and Aggregate Supply Analysis

If firms and workers could predict the future price level exactly, the short-run aggregate supply curve would be

A rapid increase in the price of oil will tend to

An increase in aggregate demand results in a(n) ________ in the ________.

The invention of the cotton gin ushered in the Industrial Revolution and began a long period of technological innovation. What did this technological change do the short-run supply curve?

Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?

If aggregate demand just decreased, which of the following may have caused the decrease?

The long-run aggregate supply curve will shift to the right if

Hurricane Katrina resulted in a decline in oil production infrastructure along the gulf coast. As a result there was an unexpected decline in oil and natural gas supplies in 2005. Suppose that this caused an increase in the price level and a decline in real GDP in 2006. Also assume that potential real GDP continued to grow due to other factors. You can assume the aggregate demand curve did not change. Show the macroeconomic equilibrium for 2005 and 2006 using the dynamic aggregate supply and aggregate demand model.

If workers leave a country to seek out better opportunities in another country, then this will

In 2005, Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices. Three years later, once the refining capacity was restored, these prices came back down. The restoration of refining capacity should

The long-run aggregate supply curve shows the relationship between the ________ and ________.

Starting from long-run equilibrium, use the basic aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is an increase in wealth.

Figure 24-2 -Refer to Figure 24-2. Ceteris paribus, a decrease in the capital stock would be represented by a movement from

Explain how each of the following events would affect the aggregate demand curve. a. Lower interest rates b. A decrease in net exports c. A decrease in the price level d. Slower income growth in other countries e. A decrease in imports

Lower personal income taxes

An increase in disposable income will shift the aggregate demand curve to the right.

On the long-run aggregate supply curve

Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run?

Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease in aggregate demand?

On average, in the recessions since 1950, it has taken ________ for employment to return to its cyclical peak.