Exam 23: Aggregate Demand and Aggregate Supply

The aggregate-demand curve shows the quantity of domestic goods and services that households, firms, the government, and customers abroad want to buy at each price level.

Which of the following explains why production rises in most years?

If businesses in general decide that they have overbuilt and so now have too much capital, their response to this would initially shift

Which of the following is included in the aggregate demand for goods and services?

Which of the following affected aggregate demand during the recession of 2008-2009?

Imagine two economies that are identical except that for a long time, economy A has had a money supply of $1,000 billion while economy B has had a money supply of $500 billion. It follows that

In which case can we be sure real GDP rises in the short run?

Assuming that a is positive, theories of short-run aggregate supply are expressed mathematically as

In the long-run, an increase in aggregate demand increases the price level, but not real GDP.

Other things the same, the aggregate quantity of goods demanded in the U.S. increases if

If aggregate demand shifts right then in the short run

Policymakers who influence aggregate demand can potentially mitigate the severity of economic fluctuations.

According to classical macroeconomic theory, changes in the money supply affect

Figure 33-5. -Refer to Figure 33-5. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience

Figure 33-12. -Refer to Figure 33-12. Explain how the aggregate demand and aggregate supply model changed during periods 1 and 2.

According to classical macroeconomic theory, changes in the money supply affect

In the first few years of the Great Depression, unemployment rose to about

The recessions associated with the business cycle come at regular intervals.

The exchange-rate effect is the idea that a higher U.S. price level causes the value of the dollar to increase in foreign exchange markets, and this effect contributes to the downward slope of the aggregate-demand curve.

Which of the following would cause prices and real GDP to rise in the short run?