Exam 9: Aggregate Demand and Supply

The collapse of home values in 2008 led to a(n) _____ in Americans' saving rates, shifting aggregate demand to the _____.

The Great Depression was characterized by a lack of aggregate demand.

If the economy shown in the figure begins on AD₁ and SRAS₁, what will happen in the short run and long run if the price of oil rises significantly?

The short-run aggregate supply curve is positively sloped because

The short-run aggregate supply curve is positively sloped, since many input costs are slow to change in the short run.

When interest rates fall, investment will increase, and the aggregate demand curve will shift to the right.

Which set of events would lead to an increase in a country's aggregate demand?

A stronger dollar will shift the U.S. aggregate demand curve to the _____ and _____ output demanded.

Increased government regulation can cause the aggregate supply curve to shift to the left.

The aggregate _____ curve shows the amount of output that firms are willing to produce at various price levels.

The long-run supply curve is

During demand-pull inflation, the economy cannot expand beyond full employment.

If the U.S. aggregate price level falls

Which factor will cause the aggregate demand curve to shift to the right?

The short-run aggregate supply curve is vertical.

(Figure: Understanding Aggregate Graphs) If an economy is currently at point a, this figure depicts the economy in

Technological advancements increase aggregate supply.

A decrease in regulation would cause aggregate

_____ inflation occurs when a supply shock reduces aggregate supply.

In the short run, a decrease in market power (or monopolization) will