Exam 23: Aggregate Demand and Supply Analysis

By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the inflation rate causes

The aggregate demand curve is the total quantity of an economy's

According to aggregate demand and supply analysis, America's involvement in the Vietnam War had the effect of

One way to derive aggregate demand is by looking at its four component parts, which are:

Everything else held constant, a decrease in government spending ________ aggregate ________.

Everything else held constant, a decrease in the cost of production ________ aggregate ________.

Everything else held constant, when output is ________ the natural rate level, wages will begin to ________, decreasing short-run aggregate supply.

Everything else held constant, an increase in financial frictions________ aggregate ________.

Everything else held constant, aggregate demand increases when

Suppose the U.S. economy is producing at the natural rate of output. A depreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the long run, everything else held constant. (Assume the depreciation causes no effects in the supply side of the economy.)

As of 2009, China's economy had recovered from the global recession that began in 2008. Use aggregate demand and aggregate supply analysis to explain why, and to explain the likely consequences for China of an increase in the growth rate of the global economy.

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant, the development of a new, more productive technology will cause ________ in the unemployment rate in the long run and ________ in inflation in the short run.

Everything else held constant, when output is ________ the natural rate level, wages will begin to ________, increasing short-run aggregate supply.

A positive supply shock causes ________ to ________.

The short-run aggregate supply curve shifts to the right when

According to aggregate demand and supply analysis, the negative supply shocks of 1973-1975 and 1978-1980 had the effect of

Suppose the U.S. economy is producing at the natural rate of output. A depreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant. (Assume the depreciation causes no effects in the supply side of the economy.)

Suppose the economy is producing at the natural rate of output and the government passes legislation that severely restricts a company's ability to reduce production costs via outsourcing. Everything else held constant, this policy action will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run.

Everything else held constant, a decrease in net taxes ________ aggregate ________.

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant, the development of a new, more productive technology will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run.