Exam 13: The Aggregate Demandaggregate Supply Model

Which of the following is true about recessions in the United States?

How does the international trade effect explain the slope of the aggregate demand curve?

What happens to investment spending when the price level rises? Explain and illustrate using a loanable funds market graph.

A supply shock causes a shift in

If there is a shift in the long-run aggregate supply LRAS) curve, does the short-run aggregate supply SRAS) curve also shift? What if the SRAS curve shifts? Does this cause a shift in LRAS?

A rise in the price level that leads to a change in the interest rate, and therefore to a change in the quantity of aggregate demand, will cause

________ would cause a rightward shift of the aggregate demand curve.

An increase in the value of the dollar will

Suppose that you have the following information about the economy, where all figures are in millions of dollars: Full employment output =$2,000 Consumption = $1,200 Investment = $400 Government spending = $500 Net exports =-$200 Because short-run output is ________ full-employment output, in the long run we would expect the price level to ________.

Explain and illustrate how the short-run and long-run equilibrium levels of output and the price level are affected by legislation that increases the employer's cost of providing health care to workers.

Increases in productivity will

Refer to the following figure to answer the next questions. -Based on the figure, if the economy is currently at point B, then in the long run, we can expect the economy to naturally adjust to point

A severe drought hits a country and reduces farm output by 50 percent. This will impact

Suppose new drilling techniques increase the world oil supply. In the long run, output will ________ and the price level will ________.

In the long run, a technological advance that improves communication can be expected to ________ labor productivity and ________ unemployment.

A fall in the price level that causes a change in the real value of wealth results in

The slope of the short-run aggregate supply curve can be explained by

An increase in the minimum wage leads to an increase in the unemployment rate for unskilled workers. How is this likely to impact equilibrium output and the price level in the short run?

Refer to the following figure to answer the next questions. -Based on the figure, if the economy starts at point A and ends up at point E, then in the short run, there was an)

An increase in long-run aggregate supply can be expected to ________ the price level and ________the natural rate of unemployment.