Exam 23: Aggregate Demand and Aggregate Supply

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

Suppose speculators lost confidence in foreign economies and bought more U.S. bonds. How would this affect net exports in the U.S., and which way would this cause the aggregate demand curve to shift?

When taxes increase, consumption

Other things the same, a decrease in the price level makes the interest rate decrease, which leads to a depreciation of the dollar in the market for foreign-currency exchange.

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 Figure 33-7. Suppose the economy starts at Y. If aggregate demand increases from AD2 to AD3, then the economy moves to

Which of the following shifts aggregate demand to the left?

In the aggregate demand and aggregate supply model, sticky wages, sticky prices, and misperceptions about relative prices

List the three reasons for why the aggregate-demand curve slopes downward.

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

Other things the same, what happens to the price level and the quantity of output when the short run aggregate supply curve shifts to the right?

The aggregate quantity of goods and services demanded changes as the price level rises because

When the dollar depreciates, U.S.

The effect of an increase in the price level on the aggregate-demand curve is represented by a

Suppose the expected price level increases. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

Classical economist David Hume observed that as the money supply expanded after gold discoveries

Figure 33-4 -Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

Illustrate the classical analysis of growth and inflation with aggregate demand and long-run aggregate supply curves.

Suppose a boom in stock market prices helps make people feel wealthier. Using the model of aggregate demand and aggregate supply, identify the curves that are affected, and which way these curves would shift.

The recession of 2008-2009 was associated with a fall in housing prices which shifted aggregate demand to the left.

Other things the same, as the price level falls,