Exam 23: Aggregate Demand and Supply Analysis

If workers demand and receive higher real wages, the cost of production ________ and the short-run aggregate supply curve shifts ________.

A favourable supply shock causes ________ to ________.

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.

Demand shocks are based on the ________ based factors that can shift the aggregate demand curve.

Everything else held constant, a balanced budget increase in government spending (that is, an increase in government spending that is matched by an identical increase in net taxes)will ________.

The Friedman-Phelps inflation-augmented Phillips curve suggested that inflation would be ________ related to the expected inflation rate and ________ related to the unemployment rate.

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.

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

Everything else held constant, contractionary monetary policies will cause ________.

Everything else held constant, a change in workers' expectations about the inflation rate will cause ________ to change.

The fact that an economy always returns to the natural rate level of output is known as ________.

Figure 24-1 -In Figure 24.1 above, an equilibrium output greater than Yn is ________ attainable in the ________-run.

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 and ________ in the aggregate price level in the long run.

The financial crisis that began in August 2007 initially had ________ effect on China but caused exports to fall by ________ percent.

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

Explain how not following the Taylor principle leads to unstable inflation

An anonymous monetary policy that reduces real interest rates will ________ the inflation rate ________.

Which of the following increases aggregate supply in the short-run, everything else held constant?

The long-run aggregate supply curve shifts to the right when there is ________.

Everything else held constant, an increase in government spending ________ aggregate ________.