Exam 12: Aggregatedemand and Aggregate Supply

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

The figure shown displays various economic outcomes. If the aggregate demand curve shifts from AD₂ to AD₃, the resulting price and output in the short run would be:

A negative relationship exists between the price level and which components of GDP? I. Consumption II) Investment III) Government spending IV) Net exports

An increase in production costs will shift the _______ aggregate supply curve to the _______.

Falling output in the short run could be due to:

When the economy is operating at a point where aggregate demand equals long-run aggregate supply:

During a recession, analysts at the CBO project that the economy is operating $1.5 trillion below potential output. Assuming the MPC is 0.8, by how much would the government have to cut taxes to restore potential output?

In macroeconomics, the long run refers to:

Lower interest rates cause:

Because the prices of final goods and services tend to increase more quickly than the prices of inputs, the short-run aggregate supply curve:

When prices rise, the interest rate:

A(n) _______ relationship exists between the price level and net exports.

The relationship between government spending and the price level explains the:

A decrease in an economy's output and prices would suggest a:

A situation in which output decreases while prices increase is often referred to as:

Consumption:

In the macroeconomic model of aggregate supply and aggregate demand:

Fluctuations around the level of potential output are:

Which of the following scenarios would likely cause the aggregate demand curve to shift to the left?

In the long run, a drought that destroys most of a summer's wheat crops would cause permanently: