Exam 10: Aggregate Supply and Aggregate Demand

In the short-run, real GDP can be greater than or less than potential GDP because in the short run the money wage rate is fixed.

-In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 120 and real GDP of $12.0 trillion, then it must be the case that

-In the above figure, the economy is initially at point B. If the Fed decreases the quantity of money, there is

When the exchange rises, then the

-In the above figure, the economy is at point A and the money wage rate rises by 10 percent. If the price level is constant, firms will be willing to supply output equal to

The intertemporal substitution effect refers to substitution of

The short-run aggregate supply curve shows a positive relationship between the price level and real GDP.

Price level A ggregate demand (trillions of 2005 dollars) Short-run aggregate supply (trillions of 2005 dollars) Long-run aggregate supply (trillions of 2005 dollars) 140 4 8 7 130 5 7 7 120 6 6 7 110 7 5 7 100 8 4 7 -The data in the above table show that when the price level is 120, if aggregate demand does not change then the

The quantity of real GDP demanded equals $12.2 trillion when the price level is 90. If the price level rises to 95, the quantity of real GDP demanded equals

The price level in India increases from 131 to 137 while its trading partnersʹ price levels remain constant. As a result, people will buy ____________ Indian -made goods and there will be a ____________ movement Along Indiaʹs aggregate demand curve.

The AD curve shows the sum of

Which of the following decreases aggregate demand?

Which of the following statements is TRUE?

-In the above figure, the short-run equilibrium will eventually adjust to a long-run equilibrium with a

In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would

Suppose the current situation is such that the price level is 120, real GDP is $13 trillion, and GDP along the long-run aggregate supply curve is $12.6 trillion. What will take place to restore the long-run equilibrium?

Starting at full employment, a business cycle can be described by the following sequence: ____________ Equilibrium,____________ equilibrium, ____________equilibrium.

Moving along a short-run aggregate supply curve, ____________resource prices ____________, the money rate wage ____________, and potential GDP .

As the price level falls and other things remain the same, real wealth__________and___________ .

The business cycle occurs because aggregate demand and aggregate supply change at uneven rates.