Exam 9: Aggregate Demand and Supply

Econia and Macroland are each other's main trading partner. Which statement correctly identifies an event that would cause Econia's aggregate demand to rise and Macroland's aggregate demand to fall?

Short-run macroeconomic equilibrium occurs at the intersection of

If oil prices decline, the short-run aggregate supply curve shifts _____ and output supplied will _____.

Suppose consumers fear that a recession is coming soon. How might this fear become a self-fulfilling prophecy?

If the British pound sterling appreciates against the U.S. dollar, England buys _____ U.S. goods, causing the U.S. aggregate demand curve to shift to the _____.

In Productovia, aggregate demand increases and aggregate supply decreases. Based on the shifts of these two curves, which of these is a likely outcome?

(Figure: Determining SRAS Shifts) Which statement is NOT correct?

Demand-pull inflation occurs when aggregate demand expands so much that equilibrium output exceeds full employment output.

Which event causes an increase in aggregate demand?

A(n) _____ in oil prices and a(n) _____ in taxes will shift short-run aggregate supply to the left.

If the intersection of the short-run aggregate supply curve and the aggregate demand curve also intersect the long-run aggregate supply curve, then the economy is

Which of these is NOT a reason the aggregate demand curve is negatively sloped?

An increase in investment will cause the aggregate demand curve to shift to the right.

(Figure: Aggregate Demand Shift) The shift in aggregate demand depicted may be due to a(n)

Demand-pull inflation is caused by

The _____ effect is a reason for the negative slope of the aggregate demand curve.

If an economy is on the vertical portion of the aggregate supply curve, then it

An increase in government spending will increase aggregate demand.

Suppose the government raises income taxes, so consumers have less disposable income. This policy action will cause a(n)

Describe demand-pull inflation if the economy begins in long-run equilibrium at full employment.