Exam 26: The Determination of Aggregate Output, the Price Level, and the Interest Rate

If wages and other costs fully adjust to changes in prices in the long run, the long-run aggregate supply curve is

Refer to the information provided in Figure 26.5 below to answer the question(s) that follow. Figure 26.5 -Refer to Figure 26.5. As a result of ________, the equilibrium interest rate increases and the equilibrium output level increases.

Refer to the information provided in Figure 26.4 below to answer the question(s) that follow. Figure 26.4 -Refer to Figure 26.4. Suppose the economy is at Point A, an oil price decrease could move the economy to Point

As the interest rate decreases, the planned aggregate expenditure curve shifts downward.

The level of aggregate output demanded rises when the price level falls, because the resulting decrease in the interest rate will lead to

Aggregate demand is the total demand for goods and services in an entire economy.

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

When the ________ increases, then potential output increases.

Refer to the information provided in Figure 26.1 below to answer the question(s) that follow. Figure 26.1 -Refer to Figure 26.1. This economy reaches capacity at

In an economy, when the price level falls, consumers and firms buy more goods and services. This relationship is represented by the

If the short-run aggregate supply curve intersects the aggregate demand curve to the right of potential GDP, wages will rise.

Refer to the information provided in Figure 26.5 below to answer the question(s) that follow. Figure 26.5 -Refer to Figure 26.5. Which of the following combinations would definitely increase the equilibrium interest rate?

Which of the following sequence of events follows an open market purchase by the Fed?

The slope of the IS curve is ________ and the slope of the Fed rule is ________.

Related to the Economics in Practice on p. 541: In January 2014, ________ was confirmed as Chair of the Board of Governors of the Federal Reserve System.

A decrease in the "Z" factors shifts the Fed rule to the right.

Refer to the information provided in Figure 26.7 below to answer the question(s) that follow. Figure 26.7 -Refer to Figure 26.7. The level of aggregate output that can be sustained in the long run without inflation

A movement down the aggregate supply curve is caused by a(n)

________ shifts the Fed rule to the right.

Related to the Economics in Practice on p. 547: In the simple "Keynesian" view, if planned aggregate expenditure and aggregate demand exceed capacity output, there is