Exam 14: A simple model of the macro economy

Suppose workers become pessimistic about their future employment,which causes them to save more and spend less.If the economy is on the intermediate range of the aggregate supply curve,then:

Which of the following are beliefs of classical theory?

Exhibit 14-2 Aggregate demand and supply -In Exhibit 14-2,when aggregate demand shifts from AD₄ to AD₅,the economy experiences:

The French economist Jean-Baptiste Say transformed the equality of total output and total spending into a law that can be expressed as follows:

Along the horizontal range of the aggregate supply curve,an increase in the aggregate demand curve will increase:

Suppose an increase in government spending stimulates real GDP without affecting the price level.What is the relevant range of the aggregate supply curve in this case?

Exhibit 14-1 Aggregate supply curve -In Exhibit 14-1,higher price levels allow producers to earn higher profits,stimulating production and employment in:

The consumption function explains:

The most volatile component of aggregate expenditures is:

The aggregate supply curve:

A decrease in aggregate supply can lead to:

More favourable aggregate supply conditions can cause:

The spending multiplier implies that any change in government spending will have a proportionally smaller impact on real GDP.

In the aggregate demand-output model,if an economy operates above equilibrium GDP,there will be:

In the intermediate range of the aggregate supply curve,higher aggregate demand will increase:

As income grows,the consumption:

Gradual adjustment of prices and wages to an increase in the aggregate demand curve implies that the aggregate supply curve is:

If people believe inflation is likely to increase sharply over the next few months,which of the following is likely to occur?

If every household in Australia won a lottery which gave each of them an extra $50 000 to spend,the:

When one observes consumption and investment patterns over time,one finds that: