Exam 14: Economic Growth, the Financial System and Business Cycles

Using the following table,compute aggregate expenditure and identify the macroeconomic equilibrium.The numbers in the table are in billions of dollars.

The short-run aggregate supply curve is upward sloping because wages rise more slowly than output prices.

What is the relationship among the AD,SRAS and LRAS curves when the economy is in long-run equilibrium?

Which of the following is a true statement about the length of recessions and expansions in the Australian economy?

If more workers leave Australia to seek out better opportunities in another country than new workers arriving into Australia,then this will

Which of the following explains why the rate of unemployment continues to rise once a recession is over?

An adverse supply shock causes the short-run aggregate supply curve to shift left,increasing the price level.

Explain how the static aggregate demand and aggregate supply model gives us misleading results about the price level,particularly with respect to decreases in aggregate demand.Describe how the aggregate demand curve is different in the dynamic model as compared to the static model,and describe how potential GDP is different in the dynamic model as compared to the static model.

The resulting economic contractions and recessions in many countries during 2008 and 2009 following the global financial crisis affected the sales of personal computer manufacturers such as Dell,whose fiscal first-quarter profit fell 63 per cent in 2009.Decreases in consumer purchases of computers would be counted as a decline in ________,and decreases in business purchases of computers would be counted as a decline in ________.

When a recession ends

Suppose the economy is at a short-run equilibrium GDP that lies above potential GDP.Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?

Explain how each of the following events would affect the short-run aggregate supply curve. a. A decrease in the price level. b. A decrease in what the price level is expected to be in the future. c. A price level that is currently lower than expected. d. An unexpected decrease in the price of an important raw material. e. A decrease in the labour force.

What type of consumer good is most affected by the business cycle-durable goods or non-durable goods? Why?

The interest-rate effect is described as an increase in the price level which

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

Workers and firms both expect that prices will be 4 per cent higher next year than they are this year.As a result

Which of the following will not shift the short-run aggregate supply curve?

If Australia's economic growth rate is slower relative to other countries' economic growth rates,this will

What does the long-run aggregate supply curve show?

The impact of a natural disaster on consumers in the economy can make them very pessimistic about their future incomes.How would an increase in pessimism affect the aggregate demand curve?