Exam 33: Aggregate Demand and Aggregate Supply

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected, then some firms believe that the relative price of what they produce has

Increased output and prices in the United States in the early 1940s were mostly the result of increased government expenditures.

Recession come at

Figure 33-15. -Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4. In the short run, a favorable shift in aggregate supply would move the economy from

Other things the same, a decrease in the price level motivates people to hold

Menu costs help explain

Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP growth and inflation can be explained by

In 1986, OPEC countries increased their production of oil. This caused

Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production. This is inconsistent with monetary neutrality because

Sticky nominal wages can result in

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

The recessions associated with the business cycle come at regular intervals.

The aggregate demand and aggregate supply model implies monetary neutrality

Which of the following will both make people buy more?

Other things the same, if the U.S. price level rises, then

Other things the same, an increase in the price level induces less spending on ​

When the price level falls

Aggregate demand shifts right when the Federal Reserve

Write the mathematical expression that summarizes the three alternative explanations for the upward slope of the short run aggregate supply curve.