Exam 23: Aggregate Demand and Supply Analysis

Suppose the economy is producing at the natural rate of output. A decrease in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant.

Everything else held constant, an increase in net taxes ________ aggregate ________.

The fact that an economy always returns to the natural rate level of output is known as

Everything else held constant, when actual output exceeds the natural rate of output ________ aggregate supply ________.

The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is true of the United Kingdom's experience?

In the long run, following a combination of a negative demand shock and a temporary negative supply shock,

Everything else held constant, a balanced budget increase in government spending (that is, an increase in government spending that is matched by an identical increase in net taxes) will

Everything else held constant, an increase in planned investment expenditure ________ aggregate ________.

Everything else held constant, an autonomous monetary policy easing ________ aggregate ________.

If workers demand and receive higher real wages (a successful wage push), the cost of production ________ and the short-run aggregate supply curve shifts ________.

The long-run aggregate supply curve shifts to the right when there is

Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant.

The expectations-augmented Phillips curve implies that as expected inflation increases, nominal wages ________ to prevent real wages from ________.

The long-run aggregate supply curve is a vertical line passing through

The total quantity of an economy's final goods and services demanded at different inflation rates is

Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant.

The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is an appropriate description of the mechanism that would have ensued?

Because shifts in aggregate demand are not viewed as being particularly important to aggregate output fluctuations, they do not see much need for activist policy to eliminate high unemployment. "They" refers to proponents of

A decrease in the availability of raw materials that increases the price level is called a ________ shock

The aggregate supply curve shows the relationship between