Exam 14: Monopolistic Competition and Product Differentiation

Why do wage increases along with increases of other input prices impact the short-run aggregate supply but not the long-run aggregate supply, unless they reflect permanent reductions in the supply of those inputs?

Stagflation is generally caused by:

Which of the following is not a component of aggregate demand?

In the long-run, the price level in the economy will change the same direction as aggregate demand.

Exports are not included in GDP because they do not reflect domestic consumption.

The long-run aggregate supply curve is the relationship between the price level and the quantity of real GDP that is supplied once input prices have had time to fully adjust to that price level.

What would happen to the short-run and long-run aggregate supply curves if the capital stock grew and available supplies of natural resources expanded over the same period of time?

An increase in the U.S. price level will:

Which of the following decreases U.S. aggregate demand?

Which of the following will decrease aggregate demand?

In the long run, a decrease in the price level:

When there is a recessionary gap:

Holding all other things constant, when the price level rises, interest rates:

Either an increase in wealth or an increase in population would increase consumption and aggregate demand, other things equal.

If, due to rising demand, the price of cotton rose 10 percent while the prices of other goods and services rose an average of 15 percent,

Along the long-run aggregate supply curve, the level of RGDP supplied ____ with increases in the price level.

The short-run aggregate supply curve slopes upward because:

If exports rose and imports fell,

The short-run aggregate supply curve:

If the price level in the United States increases, domestic goods will become relatively more expensive than foreign goods. Consumers will import more and reduce the quantity of domestic goods and services they buy.