Exam 13: The Aggregate Demandaggregate Supply Model

The aggregate demand curve slopes downward because

Which of the following is true?

Which of the following would affect both short-run and long-run aggregate supply?

A decrease in aggregate demand is harmful in the short run because ________ but not in the long run because ________.

Refer to the following figure to answer the next questions. -Based on the figure, an increase in ________ could cause the economy to move from point A to point D.

When median home prices rise, the value of real wealth ________ and aggregate demand ________.

A supply shock is defined as

Refer to the following figure to answer the next questions. -Based on the figure, which points represent short-run equilibrium but not long-run equilibrium?

Input prices affect the firm’s ________, and output prices affect the firm’s ________.

A greater percentage of graduating seniors at all levels) are able to find a satisfactory job within two months of graduation. How is this likely to impact equilibrium output and the price level in the short run?

An increase in the value of the dollar will ________ exports and ________ imports.

What happens to consumption spending when the price level rises? Explain.

If prices fall, then real wealth ________ and the quantity of aggregate demand ________.

Suppose a prolonged war in a country destroys 30 percent of the capital stock. In the long run, the price level will ________ as ________.

Suppose that after living through the great recession of 2007-2009, people decide to save a greater percentage of their incomes. How does this impact the loanable funds market and the aggregate demand curve?

Suppose a country’s population is aging and the size of the workforce is declining. In the long run, output will ________ and the price level will ________.

An increase in the general price level will lead to

During the early 2000s, housing prices increased by record amounts in many parts of the United States. What was the likely impact on the aggregate demand curve?

________ would decrease short-run aggregate supply.

Shifts in the long-run aggregate supply curve are caused by