Exam 12: Aggregate Demand and Aggregate Supply

Price Level C G X M Real GDP 128 \ 18 \ 2 \ 3 \ 1 \ 5 125 20 4 3 2 4 122 22 6 3 3 3 119 24 8 3 4 2 116 26 10 3 5 1 In the accompanying table for a particular country, C is consumption expenditures, $I _ { g }$ is gross Investment expenditures, G is government expenditures, X is exports, and M is imports. All ?gures Are in billions of dollars. The interest-rate effect of changes in the price level is shown by columns

Which combination of factors would most likely increase aggregate demand?

The economy experiences an increase in the price level and an increase in real domestic output. Which is a likely explanation?

The aggregate demand curve shows the

If the price level increases, then the aggregate expenditures schedule will shift down and the aggregate demand curve will shift to the left.

The aggregate supply curve (short run) is upsloping because

The determinants of aggregate demand

When deriving the aggregate demand (AD) curve from the aggregate expenditures model, an increase in U.S. product prices would cause an increase in

Given a fixed upsloping AS curve, a rightward shift of the AD curve will

The intersection of the aggregate demand and aggregate supply curves determines the

Which would most likely increase aggregate supply?

A decline in investment will shift the AD curve to the

Real Domestic Output Demanded (in Billions) Price Level (Index Value) Real Domestic Output Supplied (in Billions) \ 3,000 350 \ 9,000 4,000 300 8,000 5,000 250 7,000 6,000 200 6,000 7,000 150 5,000 8,000 100 4,000 The accompanying table shows the aggregate demand and aggregate supply schedules for a hypothetical economy. At the price level of 150, there will be a general

An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the

Suppose that an economy produces 300 units of output, employing 50 units of input, and the price of the input is $9 per unit. The level of productivity and the per-unit cost of production are