Exam 22: Aggregate Demand and Aggregate Supply

Suppose net exports decreases by $100 million due to a slump in foreign economies.If the the value of the multiplier is 2, what happens to the domestic aggregate demand curve?

Inflationary and recessionary gaps are closed by the economy's self-correcting adjustments mechanism that shift

The long run in macroeconomic analysis is a period

Suppose investment rises by $50 billion at each price level.If the value of the multiplier is 1.5, what is the amount of change in real GDP demanded at each price level?

All of the following are held constant along a short-run aggregate supply curve except

A movement along the short-run aggregate supply curve in response to a change in the price level is called a

In the long run, a decrease in aggregate demand, all other things unchanged, will cause the price level to _______ and potential output to _______ .

Figure 7-1 -Refer to Figure 7-1.What could have caused a movement from point A to point C?

All of the following contributed to the U.S.recession of 2001 except

Suppose the U.S.experiences a recession while foreign countries that trade with the U.S.prosper.How will this affect the U.S.?

Figure 7-1 -Refer to Figure 7-1.A movement from point A to point B

An increase in aggregate demand, all other things unchanged, will generate _______ in potential output and _______ in the price level.

Suppose that product prices start rising but nominal wages do not.In that case,

As a recessionary gap is eliminated through an economy's self-correcting adjustments process,

What do economists mean by the term "sticky wage"?

In the short run, the equilibrium price level and the equilibrium level of total output are determined by the intersection of

A change in the price level produces an immediate shift of the short-run aggregate supply curve.

What is the difference between a change in aggregate demand and a change in aggregate quantity of real GDP demanded?

Suppose the economy is initially in long-run equilibrium.Which of the following events leads to a decrease in the price level and real GDP in the short run?

The use of government purchases, transfer payments, and taxes to influence the level of economic activity is called