Exam 8: Production and Costs

The wage rate rises.As a result,in the short run Real GDP will __________ and the price level will __________.

An increase in the interest rate __________ purchases of consumer __________.

Starting from short-run equilibrium,the following occurs: the U.S.dollar depreciates and wage rates rise.Moreover,the effect on the economy from the dollar depreciating is stronger than the effect on the economy from rising wage rates.What is the effect on the price level and Real GDP in the short run?

Which set of changes is definitely predicted to raise the price level in the short run?

A falling interest rate affects the demand for consumer __________ and shifts the AD curve to the __________.

Only a change in the price level can cause a movement from one point to another point along a given aggregate demand curve.

An adverse supply shock results in an increase in the price level and an increase in Real GDP.

If wage rates rise at the same time that labor productivity increases,what is the effect on short-run aggregate supply (SRAS)?

Suppose that C = $900,I = $300,G = $200,NX = $100,and that the money supply is equal to $300.Based upon these assumptions,velocity is equal to ________________.If consumption and velocity both rise beyond their initial levels,then it follows that another component of spending ___________ necessarily fall.

If investment changes because of a change in a factor other than the price level,then the

-Refer to Exhibit 8-3.A movement from point B to point A on AD₁ would have been the result of

-Refer to Exhibit 8-2.What word (rises or falls)should go in blank (9)and blank (10),respectively,to summarize the resulting impact on short run equilibrium of the given change in the economy?

-Refer to Exhibit 8-2.What word (rises or falls)should go in blank (3)and blank (4),respectively,to summarize the resulting impact on short run equilibrium of the given change in the economy?

If the price level remains constant but the wage rate increases,then there will be __________ in production and the SRAS curve will shift __________.

An appreciation of the U.S.dollar against foreign currencies tends to __________ U.S.net exports and shift the U.S.AD curve to the __________.

The interest rate effect occurs because a change in interest rates causes a change in the price level.

As the price level falls,

Which of the following statements represents a correct and sequentially accurate economic explanation?

Some of the factors that can shift the short-run aggregate supply curve can also cause a shift in the long-run aggregate supply curve.

__________ identifies the level of Real GDP the economy produces when all economywide adjustments have taken place and there are no misperceptions on the part of workers.