Exam 26: Bringing in the Supply Side: Unemployment and Inflation

What is the usual response of firm to an increase in the price of what they sell?

Figure 10-7 ​ ​ -Which of the diagrams in Figure 10-7 represents a period of economic growth and inflation?

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?

The only factor that can cause movement along the aggregate supply curve is the

If profit per unit equals (price − cost per unit) and costs are temporarily fixed, then the aggregate supply curve will have

The typical results of an adverse supply shock are lower output and higher inflation.

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

The equilibrium price level and the equilibrium level of real GDP are jointly determined by the intersection of the economy's aggregate supply and aggregate demand schedules.

Increases in productivity are caused by

When the expenditure schedule is too high, the result is a(n)

If aggregate quantity demanded exceeds aggregate quantity supplied, we can expect an unplanned

Which of the following shifts short-run aggregate supply right?

Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium level of real GDP and price level.

Figure 10-1 ​ -What does inflation do to the value of the oversimplified multiplier?

Inflation can be caused either by rapid growth rate of aggregate demand or by sluggish growth of aggregate supply.

Figure 10-3 ​ -In Figure 10-3, we would expect the aggregate supply curve in graph (b) to eventually

Stagflation is inflation that occurs while the economy is growing slowly or having a recession.

The usual results of an adverse supply shock are

A change in the aggregate price level moves the economy along a given aggregate supply curve.

The typical movement of the aggregate supply curve resulting from an increase in productivity is that it