Exam 8: Macroeconomic Equilibrium: Aggregate Demand and Supply

Suppose the long-run aggregate supply curve shifts to the right as a consequence of the discovery of more efficient production technologies. Given unchanged aggregate expenditure, this implies a rise in long-run equilibrium output and a decline in the equilibrium price level.

Other things held constant, when the general price level changes:

Identify the correct statement about the aggregate supply curve.

Assume that the aggregate demand increases while the short-run aggregate supply decreases. The result is a(n):

An increase in aggregate demand due to higher foreign income will cause:

The short-run aggregate supply curve will shift to the left if:

Long-run aggregate supply increases as:

If the level of prices falls, the real value of wealth also falls.

Identify the correct statement.

An increase in the real value of assets is associated with a reduction in planned aggregate expenditures.

In the long-run, if the economy is operating at the full employment level, the equilibrium level of real GDP is determined solely by the:

Suppose in Country X, wages of workers are increased in the beginning of a financial year, anticipating high inflation in the economy. However prices remain unchanged during the year. Everything else remaining constant, which of the following will be observed in this economy?

Which of the following is most likely to lead to an inward shift of the aggregate demand curve?

The purchase of fifty new food-processing machines by the Campbell Soup Corporation would be classified as investment spending.

Suppose an increase in investment spending results in an increase in equilibrium real GDP and a rise in the equilibrium price level. This implies that the aggregate supply curve for this economy is vertical.

The degree to which _____ declines during a recession or increases during an expansion depends on the amount by which the AD and/or AS curves shift.

A simultaneous increase in both unemployment and inflation is most likely to be the result of a(n):

A lower domestic price level tends to:

Pessimistic consumer expectations and decreased government spending are both associated with:

In 2009, a nation reported total imports worth $250,000 and total exports worth $225,000. This implies the nation had net exports worth $25,000 during this year.