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

The rapid development of Internet technologies during the 1990s allowed businesses to produce goods and services more cheaply than before and also gave rise to completely new services.We would show this change in the AD/AS model by moving the short-run aggregate:

The paradox of thrift will not arise if:

The short-run aggregate supply curve is most likely to shift down (to the right) if:

If the U.S.government increases its expenditures (without any changes in taxes) while the Federal Reserve Bank decreases the money supply:

Keynes believed equilibrium income was:

If the dollar were to depreciate against major foreign currency, the dollar's depreciation should result in:

Keynes believed the economy was:

In 1968, the government instituted a 26 percent income tax surcharge.In terms of the AS/AD model, this change should have:

In early 2000s, oil prices were rising because of concern about the Iraqi and other situations, along with rapid growth in demand in the Far East.Prices eventually reached over $100 a barrel.How would most economists predict these high prices should affect the U.S.economy in terms of the AD/AS model?

An example of countercyclical fiscal policy is:

The short-run aggregate supply is most likely to shift down (to the right) when actual output is:

A shift in the long run aggregate supply curve will change:

If potential output exceeds actual output, eventually:

In 1979, the Federal Reserve decided to tighten monetary policy in order to reduce inflation, which had risen to double-digit levels.The AD/AS model framework suggests that the short-run effect of this policy was to reduce:

If a country is experiencing high inflation, other things equal, the expectations of worsening inflation in the future would probably:

If the money wealth, interest rate, and international effects reduce the quantity of aggregate demand by 3 percent when the price rises by 6 percent and the multiplier is 2, then the slope of the aggregate demand curve is:

Some economists believe that the good times of the early 2000s were not sustainable due to:

A fiscal policy in which the government attempts to offset any change in aggregate expenditures that would create a business cycle is called a:

The shapes of the curves in the AS/AD model are based upon the:

Refer to the following graphs. Which of the graphs correctly labels the axes of the AS/AD model?