Exam 23: Aggregate Demand and Aggregate Supply

The recession of 2008-2009 was in many ways the worst macroeconomic event in more than half a century.

If banks and speculators in the U.S. decided to exchange U.S. dollars for the foreign currencies of other countries, but foreigners do not desire to increase their holdings of U.S. dollars, then U.S. net exports would

Changes in the price level affect which components of aggregate demand?

Identify the variables that could cause shifts in both the short-run and long-run aggregate-supply curves.

Other things the same, which of the following is correct?

Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp increase in the supply of labor, a major new discovery of oil, and new environmental regulations that raise the cost of electricity production. In the short run

The Central Bank of Wiknam increases the money supply at the same time the Parliament of Wiknam passes a new investment tax credit. Which of these policies shift aggregate demand to the right?

Figure 33-10. -Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

Figure 33-9. -Refer to Figure 33-9. Suppose the economy starts where LRAS = AD1 = SRAS1. A decrease in short-run aggregate supply would be consistent with the movement to

Most economists believe that classical macroeconomic theory is a good description of the economy

Which of the following would cause stagflation?

The aggregate demand and aggregate supply graph has

An economic expansion caused by a shift in aggregate demand remedies itself over time as the expected price level

Which of the following did the Fed do during the recession of 2008-2009?

When the money supply decreases

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

The long-run effect of an increase in household consumption is to raise

Which of the following would shift long-run aggregate supply to the right?

Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production. This is inconsistent with monetary neutrality because