Exam 13: The Aggregate Demandaggregate Supply Model

When a change in the price level leads to a change in the quantity of net exports demanded, it is called the ________ effect.

Refer to the following figure to answer the next questions. -Based on the figure, starting at point A, if there is an increase in government spending, then in the short run we would move to point ________ and in the long run to point ________.

Which of the following would cause an increase in long-run aggregate supply?

An increase in short-run aggregate supply immediately leads to an)

A technological advance leads to a shift in

Menu costs help to explain

If the price level rises by 10 percent, then all else being equal, the long-run quantity of aggregate supply will

New drilling technologies lead to a 50 percent increase in oil reserves. How will this impact equilibrium output and the price level?

Economic growth in the rest of the world slows down. In the short run, one can expect output in the United States to ________ and the price level to________.

All else being equal, an increase in ________ would shift the long-run aggregate supply curve to the left.

Refer to the following figure to answer the next questions. -Based on the figure, if the economy is currently at point B because of a shift in aggregate demand, then in the long run, we can expect we will move to

Refer to the following figure to answer the next questions. -Based on the figure, which of the following would cause the long-run equilibrium point to change from point B to point D?

Which of the following causes an increase in short-run aggregate supply?

Suppose interest rates increase from 1 percent to 3 percent. In the short run, one can expect output in the United States to ________ and the price level to ________.

The long run is best defined as a period of time such that

Suppose housing values fall during a recession. In the short run,

According to the interest rate effect, an increase in the price level leads to ________ in the interest rate, and therefore to ________ in the quantity of aggregate demand.

Suppose advances in computer technology lead to a surge in worker productivity. In the long run,output will ________ and the price level will ________.

An increase in aggregate demand is harmful because

Suppose an economy has a law that requires all wages to be adjusted quarterly to reflect changes in the general price level. This means wages either increase or decrease depending on the percent change in the general price level. In this economy