Exam 23: Aggregate Demand and Supply Analysis

Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Bank of Canada will cause ________ in real GDP in the long run and ________ in the inflation rate in the long run, everything else held constant.

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

A ________supply shock ________ prices will cause the real interest rate to ________ in the short run.

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

In deriving the aggregate demand curve a ________ in the price level leads to ________ in the real money supply because the nominal quantity of dollars can purchase ________ goods and services.

-In the figure above, an equilibrium output greater than Y_n is ________ attainable in the ________-run.

If workers demand and receive higher real wages, the cost of production ________ and the short-run aggregate supply curve shifts ________.

An anonymous monetary policy that reduces real interest rates will ________ the inflation rate ________.

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 the aggregate price level in the short run.

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 and ________ in the aggregate price level in the long run.

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 the inflation rate in the long run, everything else held constant.

Suppose the Canadian economy is producing at the natural rate of output. An appreciation of the Canadian dollar will cause ________ in real GDP in the short run and ________ in the aggregate price level in the short run, everything else held constant. (Assume the appreciation causes no effects in the supply side of the economy.)

In deriving the aggregate demand curve a ________ price level ________ the money supply in real terms, raises interest rates, and ________ the equilibrium level of aggregate output.

The aggregate demand curve has the usual downward slope, since a ________ price level ________ the real money supply, raises interest rates, and lowers the equilibrium level of aggregate output, everything else held constant.

The Chinese central bank is ________.

Consider the following aggregate demand curve Y = 22-1p and a short-run aggregate supply curve given by: p = 4 + 3(Y - 10). Find the equilibrium output and inflation rate.

Demand shocks are based on the ________ based factors that can shift the aggregate demand curve.

Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Bank of Canada will cause ________ in real GDP in the long run and ________ in the inflation rate in the long run, everything else held constant.

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

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