Exam 23: Aggregate Demand and Aggregate Supply

Suppose technology advances within a nation. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

Imagine the U.S. economy is in long-run equilibrium. Then suppose the value of the U.S. dollar decreases. At the same time, people in the U.S. revise their expectations so that the expected price level rises. We would expect that in the short-run

Aggregate demand shifts right if at a given price level

If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then

Which of the following correctly expresses why the short-run aggregate-supply curve slopes upward?

Other things the same, if the price level falls, people

The average price level is measured by

Which of the following would raise the price level in both the short and long run?

Which of the following effects provide incentives for consumers to spend less when the price level rises?

Aggregate demand shifts to the left if the money supply increases.

Which of the following by itself is consistent with the directions that the price level and real GDP changed at the onset of the Great Depression?

Which of the following shifts short-run aggregate supply left?

During the 2008-2009 unemployment rose from about 4.4% to about

The aggregate-demand curve

Make a list of things that would shift the aggregate demand curve to the right.

Which of the following shifts aggregate demand right?

Other things the same, as the price level falls, the real value of a dollar

Financial Crisis Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time. -Refer to Stock Market Boom 2015. In the short run what happens to the price level and real GDP?

The aggregate-demand curve shows the

Microeconomic substitution is impossible for the economy as a whole because