Exam 12: Aggregate Demand and Aggregate Supply

Suppose that an economy produces 2,400 units of output, employing 60 units of input, and the price of the input is $30 per unit. The per-unit cost of production is

In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to

An increase in investment spending caused by higher expected rates of return will

Explain the three reasons given for the downward slope of the aggregate demand curve.

In the diagram, the economy's short-run AS curve is line ___, and its long-run AS curve is line ___.

An increase in aggregate expenditures resulting from a decrease in the price level is equivalent to a

The size of the multiplier associated with an initial increase in spending will be

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of

An increase in imports (independent of a change in the U.S. price level) will increase both U.S. aggregate supply and U.S. aggregate demand.

Macroeconomic equilibrium in the short run always occurs at full-employment GDP.

The following factors explain the inverse relationship between the price level and the total demand for output, except

Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. All else being equal, if the price of each input increased from $4 to $6, Productivity would

1. Real-Balances Effect 2. Household Expectations 3. Interest-Rate Effect 4. Personal Income Tax Rates 5. Profit Expectations 6. National Incomes Abroad 7. Government Spending 8. Foreign Purchases Effect 9. Exchange Rates 10. Degree of Excess Capacity Answer the question based on the accompanying list of factors that are related to the aggregate demand curve. A change in net export spending would most likely be caused by changes in

In the diagram, the economy's immediate-short-run aggregate supply curve is shown by line

What is the aggregate demand curve? What is the character of its slope?

If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium

The oil crisis in the 1970s can best be illustrated as a shift of the aggregate demand curve to the left.

The immediate-short-run aggregate supply curve represents circumstances where

A fall in the prices of inputs will shift the aggregate