Exam 33: Aggregate Demand and Aggregate Supply

Which of the following is not a determinant of the long-run level of real GDP?

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

We can explain continued increases in both output and the price level by supposing that only aggregate demand shifted right over time.

An increase in the money supply causes output to rise in the long run.

Changes in what four variables will shift the long run aggregate supply curve?

Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? If the government does nothing, what ensures that the economy still eventually gets back to the natural rate of output?

The primary purpose of the aggregate demand and aggregate supply model is to demonstrate the classical dichotomy.

Figure 33-2 ​ -Refer to Figure 33-2. If the economy is in long-run equilibrium, then an adverse shift in short-run aggregate supply would move the economy from

Economic expansions in Europe and China would cause the U.S. price level