Exam 14: The Aggregate Model of the Macro Economy

If there is an autonomous increase in spending a rightward shift in the aggregate demand curve) and the Fed wishes to hold real income constant, then the Fed would:

Expansionary fiscal policy should be used if:

A decrease in taxes would shift the:

An increase in government expenditure would shift the:

The aggregate supply curve that defines the level of full employment or potential output based on a given amount of resources, efficiency, and technology in the economy is called:

In the short-run along the horizontal portion of the aggregate supply curve, an increase in the budget deficit and an expansionary monetary policy would:

An increase in foreign real income would shift the:

Aggregate supply changes much faster than aggregate demand.

What are the reasons for a decrease in the NAIRU.

Economic variables that generally turn down after a recession begins and turn back up after the recovery starts are called:

A decrease in the nominal money supply would shift the:

Lower interest rates are generally charged on more risky investments and on securities that have longer maturities.

Explain the long-run consequences of continued increases in the money supply.

Contractionary monetary policy will shift the AD curve rightward.

A decrease in resources, efficiency, or technology will shift the:

An increase in the costs of resources or inputs of production would shift the:

At a given price level, an increase in stock market wealth will shift the aggregate demand curve:

Expansionary monetary policy should be used if: