Exam 24: Aggregate Demand and Supply Analysis

Everything else held constant,an autonomous monetary policy tightening ________ aggregate ________.

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,expansionary monetary policies will cause ________.

The downward slope of the aggregate demand curve is due to ________ and ________.

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.

Because shifts in aggregate demand are not viewed as being particularly important to aggregate output fluctuations,they do not see much need for activist policy to eliminate high unemployment."They" refers to proponents of ________.

This theory views shocks to tastes (workers' willingness to work,for example)and technology (productivity)as the major driving forces behind short-run fluctuations in the business cycle because these shocks lead to substantial short-run fluctuations in the natural rate of output.

The long-run aggregate supply curve is ________.

The aggregate demand curve has the usual downward slope,since a ________ price level ________ the real money supply,raises interest rates,and lowers the equilibrium level of aggregate output,everything else held constant.

The run-up of oil prices in 2007 led to ________.

In the long run,following a combination of a negative demand shock and a temporary negative supply shock,________.

Economists believe the natural rate of unemployment is approximately ________ percent.

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

Everything else held constant,an increase in planned investment expenditure ________ aggregate ________.

Suppose the Canadian economy is producing at the natural rate of output.An appreciation of the Canadian dollar will cause ________ in real GDP in the short run and ________ in the aggregate price level in the short run,everything else held constant.(Assume the appreciation causes no effects in the supply side of the economy.)

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

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

Everything else held constant,a purchase of government securities by the Bank of Canada will cause ________.

Everything else held constant,when actual output exceeds the natural rate of output ________ aggregate supply ________.

The aggregate demand-aggregate supply framework indicates that the long-run effect of a ________ in the money supply is an increase in ________,everything else held constant.