Exam 20: Aggregate Demand and Aggregate Supply

Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, they can offset the initial shift by shifting

Figure 33-5. -Refer to Figure 33-5. The shift of the short-run aggregate-supply curve from SRAS1 to SRAS2

Which of the following alone can explain the change in the price level and output during World War II?

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%, then firms have

Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To explain this

Keynes explained that recessions and depressions occur because of

Which of the following shifts aggregate demand to the right?

Refer to Political Instability Abroad. What would the change in the exchange rate make happen to U.S. net exports and U.S. aggregate demand?

During World War II,

Aggregate demand shifts right if

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

Which of the following is a lesson concerning shifts in aggregate demand?

If output is above its natural rate, then according to sticky-wage theory

Suppose the economy is in long-run equilibrium. If there is a sharp decline in government purchases combined with a significant increase in immigration of skilled workers, then in the short run,

When the money supply decreases

When taxes increase, consumption

An increase in the money supply causes output to rise in the long run.

Other things the same, the aggregate quantity of output supplied will decrease if the price level

If wages are sticky, then a greater than expected increase in the price level

Which of the following would cause investment spending to decrease and aggregate demand to shift left?