Exam 22: Aggregate Demand and Supply Analysis

A negative supply shock causes ________ to ________.

Suppose the U.S.economy is producing at the natural rate of output. A depreciation of the U.S.dollar will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.(Assume the depreciation causes no effects in the supply side of the economy.)

The price of a barrel of oil doubled between 2007 and the middle of 2008.To make matters worse,a financial crisis hit the U.S.economy starting in August of 2007.Which of the following is an appropriate description of the mechanism that would have ensued?

Everything else held constant,when output is ________ the natural rate level,wages will begin to ________,decreasing short-run aggregate supply.

Everything else held constant,if workers expect an increase in inflation,________ aggregate supply ________.

Using the aggregate demand-aggregate supply model,explain and demonstrate graphically the short-run and long-run effects of an increase in the money supply.

Everything else held constant,an increase in financial frictions ________ aggregate ________.

Everything else held constant,a decrease in planned investment expenditure ________ aggregate ________.

Explain through the component parts of aggregate demand why the aggregate demand curve slopes down with respect to the inflation rate.Be sure to discuss two channels through which changes in inflation rates affect demand.

Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.

By analyzing aggregate demand through its component parts,we can conclude that,everything else held constant,a decline in the inflation rate causes

The long-run aggregate supply curve is a vertical line passing through

Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Fed will cause ________ in real GDP the the short run and ________ in inflation in the short run,everything else held constant.

According to aggregate demand and supply analysis,America's involvement in the Vietnam War had the effect of

Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.

The price of a barrel of oil doubled between 2007 and the middle of 2008.To make matters worse,a financial crisis hit the U.S.economy starting in August of 2007.Which of the following is true of the United Kingdom's experience?

The short-run aggregate supply curve shifts to the right when

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant,the development of a new,more productive technology will cause ________ in the unemployment rate in the long run and ________ in inflation in the short run.

The aggregate supply curve is the total quantity of

The expectations-augmented Phillips curve implies that as expected inflation increases,nominal wages ________ to prevent real wages from ________.