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

Refer to the information provided in Figure 26.6 below to answer the question(s) that follow. Figure 26.6 -Refer to Figure 26.6. Suppose the equilibrium price level is 110. An increase in the Z factors ________ equilibrium output and ________ the price level.

If the combination r = 6% and Y = $500 billion is on the LM curve, we know that the combination r = 4% and Y = $500 billion would represent

Related to the Economics in Practice on p. 543: Which of the following categories of personal consumption expenditures are mostly left out of the Core PCE measure of the aggregate price level?

Refer to the information provided in Figure 26.6 below to answer the question(s) that follow. Figure 26.6 -Refer to Figure 26.6. Suppose the equilibrium price level is 110. An increase in the supply of oil would probably

If input prices changed at exactly the same rate as output prices, the aggregate supply curve would be

An increase in aggregate demand when the economy is operating ________ is likely to result in an increase in the overall price level and ________ in output.

In the long run

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. $700 million is the level of aggregate output that can be sustained in the long run

Decreasing government spending and and an oil embargo will both have an effect towards increasing the price level.

If wages do not fully adjust to changes in prices, the aggregate supply curve is vertical.

Related to the Economics in Practice on p. 547: In the simple "Keynesian" view, the economy has a

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. If the economy is at point A currently producing Y₀ and the Z factors increase, the economy will move to Point ________ in the short run and to Point ________ in the long run.

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. For this economy to produce at Point B and sustain it without inflation,

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. Potential output

Other things equal, an increase in government spending shifts

The rationale underlying policies to deregulate the economy is that these policies would

A decrease in the price level is likely to decrease the aggregate amount of output supplied in the short run because

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. During the 1990s, many firms in the United States were investing in new capital. If the economy was originally at Point A, this would have caused a movement to Point

When the economy is producing at full capacity, the aggregate supply curve becomes

What is the total demand for goods and services in an entire economy called?