Exam 9: Aggregate Demand and Supply

The aggregate demand curve shows the relationship between nominal GDP and the price level.

Cost-push inflation is a situation in which the

The _____ curve is positively sloped because some input costs are slow to change.

A decrease in foreign income will cause aggregate demand to shift to the left.

(Figure: Understanding Aggregate Graphs 2) If an economy is at point a, this figure depicts the economy in

The short-run supply curve slopes upward because

In the Keynesian model, the price level is _____; in the aggregate demand and supply model, the price level is _____.

Which statement is correct?

Demand-pull inflation results when consumers, businesses, and the government want to buy more than the full-employment level of output.

All of these would cause a decrease in a country's aggregate demand EXCEPT

An increase in incomes of the countries that purchase U.S.-made products will cause a(n) _____ in the _____ U.S.-made products.

Suppose when John's income increases from $10,000 to $15,000, his consumption increases from $3,000 to $4,500. What is the value of his marginal propensity to save?

Which factor is NOT a component of aggregate demand?

The curve that shows how much GDP is demanded at various price levels is called

If the prices of U.S. goods decrease overall, those goods become less competitive in the foreign market.

Explain how the wealth, export, and interest rate effects cause a negative relationship between the price level and GDP.

Increased taxes will shift the aggregate demand curve to the _____ and _____ output demanded.

Assume that Macroland is a country that imports 70% of the inputs used in its production and 40% of the products consumed. It has an overall trade balance. Which event would cause Macroland's short-run aggregate supply curve to shift to the left?

(Figure: Aggregate Demand Shift) Which of these may be an explanation for the shift in aggregate demand from A to B?

Describe why the aggregate demand curve has a negative slope.