Exam 12: B: Aggregate Demand and Aggregate Supply

We would expect a decline in personal and corporate income taxes to:

The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy: Suppose that the price of each input increased from $5 to $8.The per unit cost of production in the above economy would:

The following table is for a particular country in which C is consumption expenditures, I_g is gross investment expenditures, G is government expenditures, X is exports, and M is imports.All figures are in billions of dollars.Each question is independent of the other questions. Refer to the above table.If the equilibrium level of real GDP is $43 billion in this country, its level of consumption will be:

Which of the factors below best explain the downward slope of aggregate demand curve? The following list of factors, are related to the aggregate demand curve.Real-balances effect Household expectations Interest-rate effect Personal income tax rates Profit expectations National income abroad Government spending Foreign trade effect Exchange rates Degree of excess capacity

The factors which affect the amounts that consumers, businesses, government, and foreigners wish to purchase at each price level are the:

A change in business taxes and regulation can affect input prices and aggregate supply.

In terms of aggregate supply, the short run is a period in which:

The foreign trade effect suggests that a decrease in the Canadian price level relative to other countries will:

Refer to the above diagram.If the equilibrium price level is P₁, then:

The interest-rate and real-balances effects are important because they help explain:

Refer to the diagram given below. Assume that the nominal wages of workers are initially set on the basis of the price level P₂ and that the economy is initially operating at the full-employment level of output Q_f.In the short run, demand-pull inflation could best be shown as:

Refer to the diagram below. Which of the following would shift the aggregate demand curve from AD₂ to AD₁?

Refer to the diagram below. Assume that the nominal wages of workers in an economy are initially set on the basis of the price level P₂ and that the economy initially is operating at the full-employment level of output Q_f.In the short run, cost-push inflation could best be shown by a:

Which of the above diagrams best portrays the effects of a dramatic increase in energy prices?

Shifts in the aggregate supply curve are caused by changes in:

An increase in investment spending can be expected to shift the:

In which of the following sets of circumstances can we confidently expect inflation?

The interest rate effect indicates that a(n):

The foreign trade effect:

Refer to the figure given below. In the above figure, AD₁ and AS₁ represent the original aggregate demand and aggregate supply curves, respectively.AD₂ and AS₂ show the new aggregate demand and aggregate supply curves.At the original equilibrium price and quantity, this economy is experiencing: