Exam 13: Business Fluctuations

In the AD-AS model,both real and demand shocks cause business fluctuations.

During a recession:

The position of the long-run aggregate supply curve shows the economy's:

The aggregate demand curve shows the relationship between real GDP growth and the:

If spending grows by 3% while real growth is 1% and velocity is stable,then prices will be _____ at a rate of _____ according to the aggregate demand curve.

Use the following to answer questions Figure: Long-Run Aggregate Supply Curves -(Figure: Long-Run Aggregate Supply Curves)Which of the following can explain the shift of the long-run aggregate supply curve from A to C in the figure?

The unemployment rate decreases during a recession.

An increase in spending growth will cause the economy's aggregate demand curve to:

An increase in the rate of spending growth must flow into either higher inflation or:

In the AD-AS model with SRAS included,prices and wages are assumed to be perfectly flexible in the short run.

Discuss the effects of an unexpected increase in the growth rate of the money supply in the AD-AS model.

By approximately how much did investment fall between 1929 and 1933?

Approximately what percentage of banks failed between 1930 and 1932?

The largest negative shock to aggregate demand in U.S.history took place during the housing crash of 2007.

An increase in consumer pessimism will lead to increased inflation in:

In a typical year,good shocks outweigh bad shocks,and the economy grows.

What factors triggered the Great Depression?

If velocity is stable,then $\vec { v }$ equals:

From an initial equilibrium in the AD-AS model,an unexpected increase in money supply growth will cause inflation:

In the AD-AS model,wages are sticky but prices are not.