Exam 9: Aggregate Demand and Supply

Which of the following would cause an increase in a country's aggregate demand?

Which of the following would NOT affect (shift) the short-run aggregate supply curve?

The aggregate demand curve slopes _____ and has _____ on the vertical axis.

When government spending rises:

Policymakers can increase output by enacting policies that expand government spending, consumption, investment, or net exports and they could also reduce taxes.

The short-run aggregate supply curve is positively sloped because:

During demand-pull inflation, the economy cannot expand beyond full employment.

(Figure: Understanding Aggregate Graphs 2) This economy is at point a. This figure depicts an economy in:

The 1973 oil shocks created:

Which of the following factors will cause the aggregate demand curve to shift to the right?

Price stickiness refers to:

The more time a free market economy has to adjust to price changes, the:

High family debt:

(Figure: Determining SRAS Shifts) If there is a decrease in input prices, the short-run aggregate supply curve will shift from SRAS₀ to _____ and the price level will shift to _____.

A(n) _____ in productivity and a(n) _____ in taxes will shift short-run aggregate supply to the right.

_____ in wealth and _____ in government spending, along with a(n) _____ of the dollar, will shift the U.S. aggregate demand curve to the left.

According to the wealth effect, as prices fall, people feel wealthier and purchase more goods and services.

(Figure: Aggregate Demand Shift) Which of the following may be an explanation for the shift in aggregate demand from line A to line B?

A decrease in foreign income will cause aggregate demand to shift to the left.

Decreased interest rates will shift the aggregate demand curve to the _____ and _____ output demanded.