Exam 10: Aggregate Supply and Aggregate Demand

-In the above figure, which movement illustrates the impact of a falling price level and a constant money wage rate?

-In the above figure, the economy is initially at point B. If the exchange rate falls, there is

An individual holds $10,000 in a checking account and the price level rises significantly. Hence

-In the above figure, the economy is at point A and the money wage rate falls by 10 percent. If the price level is constant, firms will be willing to supply output equal to

Suppose there is a temporary increase in the price of oil. This is represented by

-Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy move in the short run?

A recessionary gap means that the level of real GDP at the short-run macroeconomic equilibrium

In the short run, a decrease in government expenditure ________ real GDP and ________ the price level.

In the short run, an increase in government expenditure on goods and services ________ real GDP and ________ the price level.

-In the figure above, the economy is at point A when the price level rises to 120. Money wage rates and other resource prices remain constant. Firms are willing to supply output equal to

If the aggregate demand curve shifts ________ faster than the long-run aggregate supply curve, then ________ occurs.

-The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. Lotus Land is in short-run macroeconomic equilibrium. In the long run, if aggregate demand does not change, then Lotus Land will return to full employment as

When the labor market is at full employment

An increase in aggregate demand is shown by a

Economic growth in India has averaged about 8.5 percent in recent years and while inflation averaged almost 9 percent. The AS-AD model shows this process as

________ economists believe that the economy is self-regulating and will be at full employment as long as monetary policy is not erratic.

-In the above figure, as the economy adjusts toward equilibrium, the

Which of the following helps determine the growth rate of potential GDP? I. capital accumulation II. technology advances III. growth in the quantity of money

-In the above figure, real GDP at full employment is

We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. In the long run