Exam 33: Aggregate Demand and Aggregate Supply

Suppose that during the Great Depression long-run aggregate supply shifted left. To be consistent with what happened to the price level and output, what would have had to happen to aggregate demand?

The position of the long-run aggregate supply curve

Make a list of things that would shift the long-run aggregate supply curve to the right.

Which of the following will reduce the price level and real output in the short run?

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

According to the classical model, which of the following would double if the quantity of money doubled?

In 2008, the United States was in recession. Which of the following things would you not expect to have happened?

The equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), where a is a positive number, represents

If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level

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

As the price level falls,

The investment component of GDP measures spending on

Which of the following fall during a recession?

A decrease in U.S. interest rates leads to

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

If aggregate demand and aggregate supply both shift right, we can be sure that the price level is higher in the short run.

Other things the same, as the price level rises, the real value of money

Which of the following accounts for about two-thirds of the decline in output during a recession?

If the price level rises above what was expected and nominal wages are fixed, then

An increase in the price level and a reduction in output would result from