Exam 9: Aggregate Demand and Supply

Which of these will shift the short-run aggregate supply curve to the left?

Demand-pull inflation occurs when aggregate demand expands beyond the level necessary for full employment.

A solution to the simultaneous emergence of deflation and unemployment is to use policies that shift the aggregate

When the monopoly power of firms increases, short-run aggregate supply shifts to the left.

A shift of the aggregate _____ curve to the _____ would cause inflation to rise and employment to increase.

If the U.S. aggregate price level rises

(Figure: Determining SRAS Shifts 3) Consider the shift in aggregate supply shown in the accompanying figure. Which of these might cause this change in short-run aggregate supply?

The long-run aggregate supply curve is most consistent with the _____ school of economic thought.

The _____ curve is vertical at full employment.

The aggregate demand curve has the price level on the vertical axis and real output on the horizontal axis.

Analyze the aggregate supply curve and differentiate between the short run and long run. Include a graph to illustrate the difference.

Which of these would NOT cause a shift in the aggregate demand curve?

The short-run aggregate supply curve

Rising confidence in the economy shifts the aggregate demand curve to the left.

Which of these would NOT cause an increase in long-run aggregate supply?

Describe the wealth effect that occurs when the price level rises, and give an example.

All of these are determinants of aggregate supply EXCEPT

The market does not necessarily clear in long-run macroeconomic equilibrium.

Ceteris paribus, a decrease in imports will increase aggregate demand.

Which of these will NOT cause a shift in the short-run aggregate supply curve?