Exam 13: Aggregate Demand and Aggregate Supply Analysis

When the price level in the United States rises relative to the price level of other countries,________ will rise,________ will fall,and ________ will fall.

An adverse supply shock causes the short-run aggregate supply curve to shift left,increasing the price level.

Figure 13-3 -Refer to Figure 13-3.Suppose the economy is at point A.If investment spending increases in the economy,where will the eventual long-run equilibrium be?

When the price of oil rises unexpectedly,the equilibrium price level ________ and the unemployment rate ________ in the short run.

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Figure 13-4 -Refer to Figure 13-4.Given the economy is at point A in year 1,what will happen to the unemployment rate in year 2?

A rapid increase in the price of oil will tend to

At a long-run macroeconomic equilibrium,real GDP is always equal to potential GDP.

All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except

Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?

Figure 13-4 -Refer to Figure 13-4.In the figure above,LRAS1 and SRAS1 denote LRAS and SRAS in year 1,while LRAS2 and SRAS2 denote LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the growth rate in potential GDP in year 2?

Figure 13-4 -Refer to Figure 13-4.Given the economy is at point A in year 1,what is the inflation rate between year 1 and year 2?

Workers expect inflation to rise from 3% to 5% next year.As a result,this should

Spending on the war in Afghanistan is essentially categorized as government purchases.How do increases in spending on the war in Afghanistan affect the aggregate demand curve?

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

The basic aggregate demand and aggregate supply curve model helps explain

Explain how menu costs affect the slope of the short-run aggregate supply curve.

Inflation is generally the result of total spending growing faster than total production.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing faster than potential real GDP?