Exam 10: Aggregate Supply and Aggregate Demand

The long-run aggregate supply curve shows the

A decrease in government expenditure on goods and services

The aggregate demand curve illustrates that, as the price level rises

Which of the following increases aggregate demand?

Higher resource costs shift the

A change in ________ results in a movement along the short-run aggregate supply curve but does not shift the short-run aggregate supply curve.

-The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. With no changes in aggregate demand or long-run aggregate supply, in long-run macroeconomic equilibrium, the price level will be ________ and real GDP will be ________.

Which of the following shifts the aggregate demand curve rightward?

Suppose that the money wage rate in the economy increases by 8 percent. As a result the

Moving along a short-run aggregate supply curve, resource prices ________, the money rate wage ________, and potential GDP ________.

With an increase in the capital stock, the short-run aggregate supply curve

When real GDP exceeds potential GDP, then the economy has

Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future. There is

________ economists believe that the economy is self-regulating and always at full employment.

If the money prices of resources changes, the LAS curve shifts.

-The above figure illustrates

-In the above figure, the movement from point B to point A might be the result of

-In the above figure, if aggregate demand does not change, the long-run equilibrium will be at the price level of ________ and real GDP of ________.

-In the above figure, the economy initially is at point B. Then price level rises by 10. The wealth effect will help

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