Exam 23: Real Gdp and the Price Level in the Short Run

FIGURE 23-5 Refer to Figure 23-5.Suppose that an increase in autonomous investment by 40 causes the AD curve to shift to the right,as shown.The simple multiplier is ________ and the multiplier is ________.

Consider a simple macro model with a given price level and demand-determined output.An exogenous change in the price level causes a

Other things being equal,when the price level rises,the real value of money holdings ________; when the domestic price level falls,the real value of money holdings ________.

Consider the AD curve in the simple macro model.Suppose there is an increase in autonomous desired consumption at a given price level.The result is

FIGURE 23-1 Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is P₀.Now,suppose the AE curve shifts to AE² and we move to a new equilibrium level of GDP at Y₂ and point E on AD².A possible cause of this change in equilibrium is

Consider the relationship between the AE curve and the AD curve.A fall in the amount of desired consumption,investment,government purchases,or net exports at any given level of national income

FIGURE 23-1 Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is P₀.Now,suppose the AE curve shifts to AE¹ and we move to a new equilibrium level of GDP at Y₁ and point A on AD⁰.A possible cause of this change in equilibrium is

Consider the basic AD/AS model.If there is a decrease in the cost of non-labour inputs to production,the result will be to

FIGURE 23-1 Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is P₀.Now,suppose there is an increase in desired investment and no change in the price level.Which of the following statements describes the likely macroeconomic effects?

Consider the following two headlines appearing in the same day: "Federal government announces major new infrastructure investments" and "New technology drives down transport costs." Choose the statement below that best describes the likely macroeconomic effects.

On a graph that shows the derivation of the AD curve,an exogenous change in the price level causes

Macroeconomic equilibrium is described as the combination of

In a macro model with a constant price level,an increase in autonomous desired consumption will cause the AE curve to shift

Consider two economies,A and B.Economy A has a marginal propensity to consume of 0.9,a net tax rate of 0.1 and a marginal propensity to import of 0.1.Economy B has a marginal propensity to consume of 0.6,a net tax rate of 0.2 and a marginal propensity to import of 0.2.Suppose there is a decrease in autonomous investment of $5 billion in each of these economies.Which of the following statements is true?

Consider two economies,A and B.Economy A has a marginal propensity to consume of 0.9,a net tax rate of 0.3 and a marginal propensity to import of 0.3.Economy B has a marginal propensity to consume of 0.9,a net tax rate of 0.1 and a marginal propensity to import of 0.3.Suppose there is an increase in autonomous investment of $5 billion in each of these economies.Which of the following statements is true?

Consider the basic AD/AS macro model.A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level

Other things being equal,a closed economy will have a ________ marginal propensity to spend and thus a ________ AD curve compared to an open economy with foreign trade.

Which of the following represents a positive aggregate supply shock?

Which of the following correctly describes one reason why the aggregate demand (AD)curve slopes downward?

FIGURE 23-3 Refer to Figure 23-3.Which of the following statements correctly describes the difference between the multipliers (in response to an increase in autonomous expenditure)in Economy A and Economy B? The multiplier in Economy A is ________ while the multiplier in Economy B is ________.