Exam 15: Aggregate Demand and Aggregate Supply Analysis

If potential GDP is equal to $1 800 billion,what does the long-run aggregate supply curve look like?

The beginning of an economic contraction coincides with a/an ________ while during an economic expansion ________.

Which of the following is considered a 'supply shock'?

Why is the long-run aggregate supply curve vertical? _____________________________________________________________________________________________ _____________________________________________________________________________________________

At a long-run macroeconomic equilibrium,real GDP is always equal to potential GDP.

Which of the following is not a phase in the business cycle?

An 'economic contraction' can cause the unemployment rate to ________ and the inflation rate to ________.

What does the term 'Keynesian revolution' refer to? _____________________________________________________________________________________________ _____________________________________________________________________________________________

What happens during the contraction phase of the business cycle?

The long-run adjustment to a supply shock results in

Because of a supply shock,in the short-run

Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?

The aggregate demand curve shows the relationship between the ________ and ________.

As a proportion of GDP,the Australian economy produced fewer services in the 2000s than it did in the 1950s,which has contributed to an increase in economic stability over time.

The wealth effect occurs when the price level falls,causing the

When the price level in Australia rises relative to the price level of other countries,ceteris paribus,________ will rise,________ will fall,and ________ will fall.

An increase in the quantity of capital in the economy shifts both the short-run and long-run aggregate supply curves.

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing faster than potential GDP? _____________________________________________________________________________________________ _____________________________________________________________________________________________

What do the 'aggregate demand' and 'aggregate supply' models help explain?

Refer to Figure 15.2 for the following questions. Figure 15.2 -In Figure 15.2,given the economy is at point A in year 1 and point B in year 2,what is the growth rate in real GDP between those two years?