Exam 12: Aggregatedemand and Aggregate Supply

The figure shown displays various economic outcomes. If the aggregate demand curve shifts from AD₁ to AD₂, the resulting price and output in the long run would be:

Suppose prices in the United States increase relative to other countries. What type of shock is the U.S. economy experiencing?

When the U.S. price level decreases relative to the rest of the world:

When the economy is producing at a quantity greater than its long-run aggregate supply:

If U.S. prices increase relative to the rest of the world, we would expect:

The aggregate demand curve is downward-sloping partly due to the _______ relationship between the price level and _______.

The difference in stimulus provided by government spending versus tax cuts is caused by the fact that:

Which of the following is a component of aggregate demand?

During the dot-com bubble, consumers believed that the Internet would radically change the shopping experience and lead to higher incomes throughout the economy. How would the dot-com bubble be best represented in the AD/AS model?

A sudden increase in immigration would be considered a(n):

When the price level increases, people:

When the government is considering whether it should change its spending in response to a recession, it must weigh the trade-off between _______ and _______.

If the government were to increase income taxes, we would predict:

When the U.S. price level decreases, we would expect a(n) _______ the aggregate demand curve.

The aggregate supply and aggregate demand model is used to explain:

A decrease in output and an increase in prices would indicate that the economy has experienced a:

If an economy is in a recession, and the government increases its spending to bring the economy back to its long-run equilibrium, the long-run level of output will:

The introduction of the power loom during the Industrial Revolution caused the _______ aggregate supply curve to shift to the _______.

In the macroeconomic model of aggregate supply and aggregate demand, quantity is:

A year-long drought that destroys most of the summer's crops would be considered a: