Exam 10: Aggregate Supply and Aggregate Demand

-Use the figure above to answer this question. At a price level of 90

A classical economist believes that

-In the figure above, in the short-run macroeconomic equilibrium

What is the difference between the long-run aggregate supply and the short-run aggregate supply curves?

A monetarist economist believes that if the economy was left alone, it would rarely operate at full employment.

The short-run aggregate supply curve shows a positive relationship between the price level and real GDP.

In a short-run macroeconomic equilibrium, real GDP exceeds potential GDP. If aggregate demand does not change, then the

One reason that the aggregate demand curve has a negative slope is because

-In the above figure, what is the short-run equilibrium real GDP and the short-run equilibrium price level?

For movements along the long-run aggregate supply curve

The long-run aggregate supply curve shows the

Along a short-run aggregate supply curve, a decrease in the price level means that

Suppose that the economy begins at a long-run equilibrium. Which of the following raises the price level and decrease real GDP in the short run?

Consider a BMW automobile plant. If the price of BMWs increase by 10 percent and the money wage rate and other costs ________, there will be ________.

The quantity of real GDP supplied depends on the

-The curve labeled A in the above figure will shift rightward when

The positive relationship between short-run aggregate supply and the price level indicates that, in the short run

-The curve labeled A in the above figure is a

In the short-run, real GDP can be greater than or less than potential GDP because in the short run the

-In the above figure, if the economy is at point a, an increase in ________ will move the economy to ________.