Exam 10: Dynamic Change, Economic Fluctuations, and the Ad--As Model

What impact did the soaring oil prices of 2007 and the first half of 2008 have on the economy?

Which of the following will most likely occur in the short run when the long-run equilibrium of an economy is disturbed by an unanticipated decrease in aggregate demand?

An increase in the exchange rate value of the U.S. dollar, relative to the Japanese yen, will cause U.S. imports from Japan to

Which of the following reduced aggregate demand and thereby contributed to the crisis of 2008?

Which of the following is most likely to throw an economy into a recession?

If the exchange rate value of the dollar depreciates relative to other currencies, we would expect

If an unanticipated decrease in aggregate demand results in an output below the economy's long-run capacity, long-run equilibrium will eventually be restored by

Which of the following will lead to an increase in aggregate demand in the United States?

If Asian economies suffer a serious economic slump, U.S. net exports will

Construct a graph of the aggregate goods and services market for an economy experiencing the following. a.a recession b.full employment c.an economic boom

Which of the following is the best example of a supply shock?

When the U.S. dollar appreciates,

An increase in capital formation that expands long-run aggregate supply will

Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, we would expect

If an unanticipated reduction in aggregate demand throws a market economy into a recession,

Figure 10-18 As shown in Figure 10-18, the economy's point of short-run equilibrium, given by the shift of the aggregate demand curve from AD₁ to AD₂, is

Figure 10-18 Beginning in Figure 10-18 from long-run equilibrium at point E₁, the aggregate demand curve shifts to AD₂. The economy's path to a new long-run equilibrium is represented by a movement from

What would be the effect of a decrease in the real interest rate and an increase in the expected inflation rate?

Suppose the economy is initially in long-run equilibrium and then it experiences a supply shock in the form of sharply higher energy prices. Which of the following is true?

If Europe and Japan experience rapid growth in their incomes, other things constant, this will cause