Exam 22: Aggregate Demand and Aggregate Supply

If the price level in the United States decreases,domestic goods will become relatively cheaper than foreign goods,the demand for U.S.-made goods will increase,and the U.S.aggregate demand curve will shift to the right.

What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time?

Exhibit 22-3 In Exhibit 22-3,at point A an increase in AD would lead to:

If both imports and exports fell,

The long-run aggregate supply relationship refers to:

If input prices adjusted just as quickly as output prices,the profit effect leading to an increase in RGDP supplied would disappear.

The four major components of aggregate demand are consumption,investment,government purchases of goods and services,and net exports.

If the profit effect and misperception effect existed in both the short run and the long run,then SRAS is ____ and LRAS is ____.

Which of the following is not a component of aggregate demand?

If the overall price level decreases,then the aggregate demand curve will shift to the right.

The SRAS curve is vertical at the natural level of real output.

What would happen to the short-run and long-run aggregate supply curves if the capital stock grew and available supplies of natural resources expanded over the same period of time?

A reduction in the price level will cause the aggregate demand curve to shift to the left.

What are the major factors that determine investment,and what impact does each have on aggregate demand?

The quantity of RGDP supplied will decrease in both the short run and long run when the price level falls.

Exhibit 22-1 Refer to Exhibit 22-1.Which of the following would be illustrated by a shift in aggregate demand from AD₀ to AD₁?

Exhibit 22-1 Refer to Exhibit 22-1.Which of the following would be illustrated by a shift in aggregate demand from AD₀ to AD₂?

If there was no profit effect or misperception effect in the short run,then SRAS is ____ and LRAS is ____.

Explain how changes in the stock of capital affect aggregate supply.

Increases in government regulations can make it more costly for producers,and the increase in production costs results in a leftward shift of both the short-run and long-run aggregate supply curves.