Exam 27: Bringing in the Supply Side: Unemployment and Inflation?

From 2005 to 2006 the U.S.economy experienced significant inflation because the aggregate demand curve shifted outward more than the aggregate supply curve shifted outward.

For most firms in the economy, the largest part of factor costs is the cost of

The aggregate demand and aggregate supply curve intersect

A decrease in the price of resources will cause the aggregate supply curve to

A recessionary gap exists when

The aggregate supply curve is

Figure 10-5 -In Figure 10-5, which graph best illustrates the situation of an economy with high unemployment that experiences an increase in investment spending?

As the slope of the aggregate supply curve increases, this indicates that

Table 10-1 Aggregate Quantity Aggregate Quantity Demanded (billions) Supplied (billions) Price Level \ 3500 \ 2900 65 3400 3000 75 3350 3150 90 3250 3250 110 3100 3400 130 -In Table 10-1, what is the equilibrium level of real output and the equilibrium price?

The slope of the aggregate supply curve decreases as total output increases.

Figure 10-5 -In Figure 10-5, which graph best illustrates the situation of an economy near full employment that experiences an increase in autonomous consumer spending?

Using the aggregate demand/aggregate supply model, explain the difference in the employment prospects of the graduates of 2007 and 2009.

A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)

Stabilization policy may be necessary to slow down the speed of the adjustment process.

When OPEC cut energy production in 1973, the aggregate supply curve shifted outward.

The aggregate supply curve is a fixed point representing potential GDP.

Figure 10-9 -Figure 10-9 illustrates a period of

Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power.

Figure 10-4 -In Figure 10-4, if full employment occurs at an output level of 4,000 and the economy is currently at an output level of 5,000 then we can expect a(n)

If the price level rises, what will happen to aggregate supply?