Exam 33: Aggregate Demand and Aggregate Supply

In the context of aggregate demand and aggregate supply, the wealth effect refers to the idea that, when the price level decreases, the real wealth of households

An increase in the interest rate causes investment to

Which of the following can explain the upward slope of the short-run aggregate supply curve?

Figure 33-6. -Refer to Figure 33-6. Which of the long-run aggregate-supply curves is consistent with a recession?

Refer to Political Instability Abroad. What would the change in the interest rate created by foreigners wanting to buy more U.S. assets do to investment spending in the U.S.?

Other things the same, if the price level rises, people

Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. This can be explained

If aggregate demand shifts right, then eventually price level expectations rise. This increase in price level expectations causes the aggregate demand curve to shift to the left back to its original position.

As the price level rises, the interest rate

Most economists believe that money neutrality

Microeconomic substitution is impossible for the economy as a whole because

Refer to Optimism. How is the new long-run equilibrium different from the original one?

The long-run aggregate supply curve shifts right if

If the price level falls, the real value of a dollar

Using the aggregate demand and aggregate supply model, a decrease of what curve is by itself consistent with the changes in prices and output that occurred during the onset of the Great Depression?

The investment component of GDP measures spending on

Figure 33-13. -Refer to Figure 33-13. Identify the price and output levels consistent with long-run equilibrium.

In the aggregate demand and aggregate supply model, sticky wages, sticky prices, and misperceptions about relative prices

In the early 1930s in the United States, there was a

Which of the following would cause investment spending to decrease and aggregate demand to shift left?