Exam 10: Dynamic Change, Economic Fluctuations, and the Ad-As Model

If the general level of prices is lower than business decision makers anticipated when they entered into long-term contracts for raw materials and other resources, which of the following is most likely to occur?

If the U.S. price level decreased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

An increase in the exchange rate value of the U.S. dollar, relative to the Japanese yen, will cause U.S. imports from Japan to

Use the figure below to answer the following question(s). Figure 10-1 -At which point in Figure 10-1 is the economy at long-run equilibrium?

When an economy is in a recession,

For an oil-importing country such as the United States, the immediate effect of a supply shock caused by an increase in the price of imported oil would tend to be

Which of the following will most likely occur as the result of an unanticipated increase in aggregate demand?

When an economy is in a recession,

Figure 10-12 -In Figure 10-12, which of the following would most likely cause the movement from point E₁ to point e₂ for the United States?

The stability of consumption over the business cycle and the ability of changes in the real interest rate to redirect aggregate demand indicate that

From mid-year 2006 to year-end 2008, housing prices

If the long-run equilibrium of an economy is disrupted by an unanticipated increase in aggregate demand (such as might result from unexpectedly strong demand for exports due to the rapid growth of incomes abroad),

If a country's currency depreciates, which of the following will most likely happen?

During the past 50 years, the production possibilities of the United States have expanded, increasing both short-run and long-run aggregate supply. Other things constant, this would lead to

An unanticipated decline in the real interest rate in the loanable funds market will cause the

Suppose the economy is initially in long-run equilibrium and then it experiences a supply shock in the form of sharply higher energy prices. Which of the following is true?

Use the figure below to answer the following question(s). Figure 10-9 -The output of the economy depicted in Figure 10-9 is

When economic growth (a gradual shift of LRAS to the right) expands the production possibilities of an economy,

What impact did the soaring oil prices of 2007 and the first half of 2008 have on the economy?

When output is less than the economy's long-run capacity, which of the following is most likely to occur?