Exam 12: Aggregate Demand and Aggregate Supply

Suppose that an economy produces 500 units of output. It takes 10 units of labor at $15 a unit and 4 units of capital at $50 a unit to produce this amount of output. The per unit cost of production is

An increase in the price level in the aggregate expenditures model would

Other things equal, a reduction in personal and business taxes can be expected to

The U.S. economy was able to achieve full employment with relative price level stability between 1996 and 2000 because

Amount of Real Output Demanded Price Level (Index Value) Amount of Real Output Supplied \ 200 300 \ 500 300 250 450 400 200 400 500 150 300 600 100 200 The table gives aggregate demand and supply schedules for a hypothetical economy. If the amount of real output demanded at each price level falls by $200, the equilibrium price level and Equilibrium level of real domestic output will fall to

Identify the two basic factors that affect investment spending. How does a change in investment spending affect aggregate demand?

In deriving the aggregate demand curve from the aggregate expenditures model, we note that

A rightward shift in the aggregate supply curve is best explained by an increase in

An increase in productivity will

Which of the following events would most likely reduce aggregate demand?

Refer to the graph, which shows an aggregate demand curve. If the price level decreases from 200 to 100, the real output demanded will

Which of the following would most likely shift the aggregate demand curve to the right?

If Congress passed new laws significantly increasing the regulation of business, this action would tend to

Suppose that technological advancements stimulate $20 billion in additional investment spending. If the MPC = 0.6, how much will the change in investment increase aggregate demand?

Productivity measures

The immediate-short-run aggregate supply curve is

Demand-pull inflation is illustrated in the short run aggregate supply-aggregate demand model as a shift of aggregate