Question 1

How is the long-run aggregate supply curve sloped? Explain.

Accepted Answer

The long-run aggregate supply curve is f

Question 2

List the three major determinants that can cause a shift in the short-run aggregate supply.

Accepted Answer

The determinants of short-run aggregate

Question 3

How can the aggregate demand curve be derived from the aggregate expenditures model?

Accepted Answer

The aggregate demand curve is derived fr

Question 4

The determinants of aggregate demand "determine" the location of the aggregate demand curve.Explain the four basic determinants of aggregate demand.

Accepted Answer

The four basic determinants of aggregate

Question 5

What determines the equilibrium price level and the level of real GDP in the aggregate demand-aggregate supply (short-run) model?

Accepted Answer

The interaction of short-run aggregate s

Question 6

Using the aggregate demand-aggregate supply (short-run) model, explain the impact of the public's expectations of severe inflation on real GDP and the price level.

Accepted Answer

Increased expectations of severe inflati

Question 7

Describe the change in short-run aggregate supply that should result from each of the following changes in determinants.Assume that nothing else is changing besides the identified change.(Use "Decrease" or "Increase.")
(a) A rise in the average price of inputs;
(b) An increase in worker productivity;
(c) Government antipollution regulations become stricter;
(d) A new subsidy program is enacted for new business investment in productive equipment;
(e) Energy prices decline.

Accepted Answer

(a) Decrease;
(b) Increase;
(c) Decrease

Question 8

How is the immediate short-run aggregate supply curve sloped? Explain.

Accepted Answer

The immediate short-run aggreg

Question 9

Some economists argue that it is easier to resolve demand-pull inflation than cost-push inflation.Use the aggregate demand-aggregate supply (short-run) model to explain this assertion.

Accepted Answer

To address demand-pull inflation, the go

Question 10

Using the aggregate demand-aggregate supply (short-run) model, explain how the depreciation of the Canadian dollar in terms of foreign currencies would affect the economy.

Accepted Answer

The depreciation of the Canadian dollar

Question 11

Identify the ways in which each of the following determinants would have to change to cause a decrease in aggregate demand: consumer wealth, consumer expectations, business taxes, national income in countries abroad, exchange rates.

Accepted Answer

To decrease aggregate demand, consumer w

Question 12

How can an economy already at full-employment expand without igniting inflation? Explain.

Accepted Answer

If the economy is currently at full-empl

Question 13

Describe and explain what is meant by the ratchet effect.

Accepted Answer

A ratchet is a good analogy for the effe

Question 14

How is the short-run aggregate supply curve sloped and why is it sloped this way?

Accepted Answer

The short-run aggregate supply (SRAS) cu

Question 15

What are five reasons for the downward price-level inflexibility, especially as it pertains to wages and prices?

Accepted Answer

First, wage contracts will fix wages for

Exam 12: A: Aggregate Demand and Aggregate Supply

How is the long-run aggregate supply curve sloped? Explain.

List the three major determinants that can cause a shift in the short-run aggregate supply.

How can the aggregate demand curve be derived from the aggregate expenditures model?

The determinants of aggregate demand "determine" the location of the aggregate demand curve.Explain the four basic determinants of aggregate demand.

What determines the equilibrium price level and the level of real GDP in the aggregate demand-aggregate supply (short-run) model?

Using the aggregate demand-aggregate supply (short-run) model, explain the impact of the public's expectations of severe inflation on real GDP and the price level.

How is the immediate short-run aggregate supply curve sloped? Explain.

Some economists argue that it is easier to resolve demand-pull inflation than cost-push inflation.Use the aggregate demand-aggregate supply (short-run) model to explain this assertion.

Using the aggregate demand-aggregate supply (short-run) model, explain how the depreciation of the Canadian dollar in terms of foreign currencies would affect the economy.

Identify the ways in which each of the following determinants would have to change to cause a decrease in aggregate demand: consumer wealth, consumer expectations, business taxes, national income in countries abroad, exchange rates.

How can an economy already at full-employment expand without igniting inflation? Explain.

Describe and explain what is meant by the ratchet effect.

How is the short-run aggregate supply curve sloped and why is it sloped this way?

What are five reasons for the downward price-level inflexibility, especially as it pertains to wages and prices?

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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