Exam 9: Aggregate Demand and Supply

Falling interest rates mean increased business investment and a resulting increase in quantity demand for real GDP in the aggregate economy.

Which of the following is NOT a reason the aggregate demand curve is negatively sloped?

The aggregate supply curve in the long run is vertical because wages and other input prices respond completely to a change in the price level.

The output of all the goods and services demanded in an economy at various price levels is called:

Which of the following events causes an increase in aggregate demand?

If the U.S. aggregate price level rises:

Which of the following items is NOT a determinant of aggregate demand?

In the short run, the aggregate supply curve is _____ because input prices are _____.

Factors that can shift the entire aggregate demand curve are called determinants of aggregate demand.

The full-employment level is greater than the natural rate of employment.

Which of the following statements is correct?

All of the following would cause a decrease in a country's aggregate demand EXCEPT:

(Figure: Determining SRAS Shifts) If there are advances in technology, the short-run aggregate supply curve will shift from SRAS₀ to _____ and the price level will shift to _____.

_____ inflation occurs when a supply shock reduces aggregate supply.

Which of the following would NOT cause a shift in the aggregate demand curve?

Suppose consumers spend more than usual. In the short run, prices will _____; in the long run, prices will _____ from its starting point.

An increase in interest rates will cause the aggregate demand curve to shift to the left.

If the price level is stable and if aggregate spending increases, a significant change in output occurs (showing the full impact of the spending multiplier).

(Figure: Determining SRAS Shifts 2) Which of the following might cause a change in short-run aggregate supply?

Output increases if aggregate demand _____ and aggregate supply _____.