Refer to the figure below.Suppose the economy is initially in equilibrium with output Y2 and inflation rate of 3.An increase in military spending will:

A) shift AD from AD2 to AD1. B) shift AD from AD1 to AD2. C) shift AS from AS2 to AS1. D) shift AS from AS1 to AS2. A) shift AD from AD2 to AD1. B) shift AD from AD1 to AD2. C) shift AS from AS2 to AS1. D) shift AS from AS1 to AS2. A

Exam 13: Aggregate Demand, Aggregate Supply, and Business Cycles

Refer to the figure below.Suppose the economy is initially in equilibrium with output Y₂ and inflation rate of ₃.An increase in military spending will:

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Question 1

Correct Answer:

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Changes in the expected rate of inflation will:

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Question 2

Correct Answer:

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When the economy is in short-run equilibrium, there will be ______ output gap.

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Question 3

Correct Answer:

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When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:

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Question 4

Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) __gap in the short run and inflation and output in the long run.

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Question 5

The self-correcting tendency of the economy means that falling inflation eventually eliminates:

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Question 6

Suppose the economy is currently operating at potential output; an expansionary gap may be caused by each of the following except:

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Question 7

The Great Recession was the result of:

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Question 8

A negative demand shock will shift the curve to the .

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Question 9

Shifts in ______ can push the economy out of long-run equilibrium.

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Question 10

Technological improvements:

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Question 11

A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:

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Question 12

Graphically, short-run equilibrium occurs at the intersection of the aggregate demand curve and:

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Question 13

For a given inflation rate, if bright prospects for the future of the economy cause businesses to increase spending on new capital, then the __ shifts _.

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Question 14

Refer to the figure below.The current level of GDP in this economy is ; the potential level of GDP is .

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Question 15

The AD curve because, holding all else constant, an increase in causes C, I^{P and NX to fall.}

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Question 16

When the inflation rate increases, PAE , which in turn causes Y to because of __.

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Question 17

Starting from potential output, if firms become less optimistic and decide to decrease their investment in new capital, then this will shift the curve to the left and generate .

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Question 18

High expected inflation leads to increases in wages and costs and to actual inflation.

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Question 19

Due to menu costs, many firms in the economy will increase their output:

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Question 20

Showing 1 - 20 of 101

Refer to the figure below.Suppose the economy is initially in equilibrium with output Y₂ and inflation rate of ₃.An increase in military spending will:

Changes in the expected rate of inflation will:

When the economy is in short-run equilibrium, there will be ______ output gap.

When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:

Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) __gap in the short run and inflation and output in the long run.

The self-correcting tendency of the economy means that falling inflation eventually eliminates:

Suppose the economy is currently operating at potential output; an expansionary gap may be caused by each of the following except:

The Great Recession was the result of:

A negative demand shock will shift the curve to the .

Shifts in ______ can push the economy out of long-run equilibrium.

Technological improvements:

A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:

Graphically, short-run equilibrium occurs at the intersection of the aggregate demand curve and:

For a given inflation rate, if bright prospects for the future of the economy cause businesses to increase spending on new capital, then the __ shifts _.

Refer to the figure below.The current level of GDP in this economy is ; the potential level of GDP is .

The AD curve because, holding all else constant, an increase in causes C, I^{P and NX to fall.}

When the inflation rate increases, PAE , which in turn causes Y to because of __.

Starting from potential output, if firms become less optimistic and decide to decrease their investment in new capital, then this will shift the curve to the left and generate .

High expected inflation leads to increases in wages and costs and to actual inflation.

Due to menu costs, many firms in the economy will increase their output:

Thinking Like an Economist

Comparative Advantage

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 13: Aggregate Demand, Aggregate Supply, and Business Cycles

Refer to the figure below.Suppose the economy is initially in equilibrium with output Y2 and inflation rate of 3.An increase in military spending will:

Changes in the expected rate of inflation will:

When the economy is in short-run equilibrium, there will be ______ output gap.

When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:

Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ______gap in the short run and ____inflation and ____output in the long run.

The self-correcting tendency of the economy means that falling inflation eventually eliminates:

Suppose the economy is currently operating at potential output; an expansionary gap may be caused by each of the following except:

The Great Recession was the result of:

A negative demand shock will shift the ______ curve to the ______.

Shifts in ______ can push the economy out of long-run equilibrium.

Technological improvements:

A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:

Graphically, short-run equilibrium occurs at the intersection of the aggregate demand curve and:

For a given inflation rate, if bright prospects for the future of the economy cause businesses to increase spending on new capital, then the ______ shifts _____.

Refer to the figure below.The current level of GDP in this economy is ______; the potential level of GDP is ______.

The AD curve ______ because, holding all else constant, an increase in ______ causes C, IP and NX to fall.

When the inflation rate increases, PAE ______, which in turn causes Y to ______ because of ______.

Starting from potential output, if firms become less optimistic and decide to decrease their investment in new capital, then this will shift the ______ curve to the left and generate ______.

High expected inflation leads to ____ increases in wages and costs and to ____ actual inflation.

Due to menu costs, many firms in the economy will increase their output:

Thinking Like an Economist

Comparative Advantage

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Refer to the figure below.Suppose the economy is initially in equilibrium with output Y₂ and inflation rate of ₃.An increase in military spending will:

Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) __gap in the short run and inflation and output in the long run.

A negative demand shock will shift the curve to the .

For a given inflation rate, if bright prospects for the future of the economy cause businesses to increase spending on new capital, then the __ shifts _.

Refer to the figure below.The current level of GDP in this economy is ; the potential level of GDP is .

The AD curve because, holding all else constant, an increase in causes C, I^{P and NX to fall.}

When the inflation rate increases, PAE , which in turn causes Y to because of __.

Starting from potential output, if firms become less optimistic and decide to decrease their investment in new capital, then this will shift the curve to the left and generate .

High expected inflation leads to increases in wages and costs and to actual inflation.