Exam 26: The Keynesian Short-Run Policy Model: Demand-Side Policies

From 1975 to 1995, the value of the dollar in terms of yen fell from over 300 yen per dollar to about 100 yen per dollar.Considering the impact of this alone, this would likely:

Which of the following would shift the aggregate demand curve to the left?

If actual output exceeds potential output, eventually:

The interest rate effect helps to explain why:

A decrease in the expected future income of the United States would likely:

According to the short-run aggregate supply curve, firms are most likely to respond to an increase in aggregate demand by raising:

Most economists agree that it is possible for fiscal policy to fine tune the economy.

Why would one expect the AD curve to be vertical?

Which of the following is not a reason why the AD curve slopes downward?

Refer to the following graph. The upward sloping relationship in the diagram represents the:

Starting from a long-run equilibrium, an increase in government expenditures increases output in the short run but not in the long run.

Refer to the graph shown.A movement from A to B is most likely to be caused by:

If productivity and wages both rise by 3 percent, then the aggregate supply curve shifts up.

In the AS/AD model, as the price level falls, the holders of money become richer and buy more.This is one reason why the aggregate demand curve is downward sloping.

The paradox of thrift occurs when:

A sharp increase in oil prices along with a decline in labor productivity decline will likely shift the:

The multiplier effect exists because:

During the early years of the Reagan administration, some of the presidential advisors argued that tax cuts could reduce inflation because they would give people an incentive to produce more.Critics of this argument believed that tax cuts would increase inflation, not reduce it.The critics were arguing that tax cuts move the:

In the long run, the position of the short-run aggregate supply curve determines:

As prices fall, the value of people's existing assets rises and people increase expenditures.This occurs as a result of the: