Exam 9: Aggregate Demand and Supply

Which of the following tends to make aggregate demand decrease by more than the amount that consumer spending decreases?

When aggregate prices rise, U.S. goods become more expensive relative to goods from other countries; this leads to an increase in exports.

(Figure: Aggregate Demand Shift) The shift in aggregate demand depicted may be due to a(n):

Short-run macroeconomic equilibrium occurs at the intersection of:

Which of the following would NOT cause a rightward shift in aggregate supply?

According to the textbook, what brought the United States out of the Great Depression?

The long-run aggregate supply curve is positively sloped.

Which of the following events would reduce short-run aggregate supply but not long-run aggregate supply?

Too much spending will cause:

The collapse of housing prices in 2006-2011 caused aggregate demand to fall when homeowners increased their savings to offset the drop in the value of their homes.

Government spending on Social Security:

Cost-push inflation is a situation in which the:

Rising input prices increase short-run aggregate supply.

If the market power of firms increases, what happens in the AD/AS model?

An increase in interest rates will lead to an increase in aggregate demand.

During the 1970s, some countries stopped oil sales to the United States. As petroleum prices rose:

Suppose a booming stock market encourages consumption spending to rise dramatically. What would be the most likely long-run impact?

The curve that shows how much GDP is demanded at various price levels is called:

If firms believe that the business climate is improving, then the short-run aggregate supply will shift to the right.

The idea that new spending creates more new spending is known as the: