Exam 13: Aggregate Demand and Aggregate Supply Analysis

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Suppose there has been an increase in investment.As a result,real GDP will ________ in the short run,and ________ in the long run.

The new classical model has as its central idea that

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in productivity would be represented by a movement from

Proponents of the real business cycle model argue that the short-run aggregate supply curve is

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

As the recession persisted into 2009,the unemployment rate in the United States rose to ________,the highest rate since the recession of 2001-2002 and the second highest since the Great Depression.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in the price level would be represented by a movement from

All of the following would be considered a positive addition to household wealth except

New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in government spending would be represented by a movement from

Workers and firms both expect that prices will be 3% higher next year than they are this year.As a result,

According to the real business cycle model,________ in aggregate demand ________ GDP.

The ________ curve is vertical.

Explain how each of the following events would affect the long-run aggregate supply curve. a.A lower price level b.A decrease in the labor force c.A decrease in the quantity of capital goods d.Technological change

The long-run aggregate supply curve shows the relationship between the ________ and ________.

When potential GDP increases,short-run aggregate supply also increases,but long-run aggregate supply does not change.

Refer to the Article Summary.The unexpected increase in the supply of oil mentioned in the article summary resulted in a decrease in the price of oil.After an unexpected decrease in the price of oil,the long-run adjustment ________ the price level and ________ the unemployment rate as they return to their original levels.

Briefly describe monetarism and the monetary growth rule.

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in productivity would be represented by a movement from