Exam 11: Aggregate Supply and Aggregate Demand

The Reserve Bank responds to an increase in unemployment caused by a decrease in the AS curve by lowering interest rates. This will i. shift the aggregate demand curve rightward and raise the price level. ii. shift the aggregate demand curve rightward and the aggregate supply curve leftward, raising prices. iii. result in lower employment and a higher price level.

Demand-pull inflation starts with a shift of the

Changes in which of the following do NOT shift the AS curve? i. The price level ii. Potential GDP iii. The money wage rate

Starting from a situation of full employment, an increase in aggregate demand creates ________ and ________ the price level.

If the price level increases, there is ________ the AD curve and the quantity of real GDP demanded ________.

-If the money wage rate and the price level both rise by the same proportion, then, in the figure above, the potential GDP line ________, and the aggregate supply curve ________.

Which of the following shifts the aggregate supply curve rightward?

The table gives the aggregate demand and aggregate supply schedules for a nation. -The table above gives data for the nation of Pearl, a small island in the South Pacific. The economy is at full employment when real GDP is