Exam 10: Aggregate Supply.

Exhibit 10.6 -Refer to Exhibit 10.6 which shows the equilibrium price level and real GDP in an aggregate demand-aggregate supply model. Which of the following economic changes is depicted by a movement from point e to point e'?

If the price level in the current year is much higher than the expected price level in an economy, _____

If resource prices are "sticky" downward and a recessionary gap develops in an economy, the short-run aggregate supply curve will _____

Suppose the real wage of a worker remains unchanged between Year 1 and Year 2 but the nominal wage decreases from $20 in Year 1 to $18 in Year 2. This implies that the price level has _____

If the price level in an economy turns out to be higher than that expected by workers and firms, firms _____

Workers usually negotiate compensation in terms of the nominal wage because wage agreements are based on expected price levels.

A situation in which workers and employers fail to achieve an outcome that all would prefer is known as _____

Given implicit or explicit resource price agreements, if the actual price level is below the expected price level in an economy, the _____

Which of the following is true of a lower price level?

When the economy's actual price level exceeds the expected price level in the short run, _____

Exhibit 10.1 -Refer to Exhibit 10.1, which shows the short-run aggregate supply curve of an economy. If the actual price level exceeds the expected price level, then _____

Which of these is an advantage of long-term contracts in resource markets?

Exhibit 10.8 -Refer to Exhibit 10.8, which shows the long-run equilibrium in an aggregate demand-aggregate supply model. The change in real GDP in this exhibit from Y₁ to Y₂ could have been caused by _____

Which of these is most likely to shift the long-run aggregate supply curve to the left?

Which of the following is true of a beneficial supply shock?

The short-run aggregate supply curve _____

In the aggregate demand-aggregate supply model, which of these changes is most likely when the cost of production increases in the long run?

Table 10.1 $\begin{array}{l}\text { Table } 10.1\\\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output } \\\text { Demanded (\$) }\end{array} & \begin{array} { c } \text { Price } \\\text { Level }\end{array} & \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output } \\\text { Supplied (\$) }\end{array} \\\hline 7.0 & 110 & 5.0 \\\hline 6.5 & 120 & 5.5 \\\hline 6.0 & 130 & 6.0 \\\hline 5.5 & 140 & 6.5 \\\hline 5.0 & 150 & 7.0 \\\hline\end{array}\end{array}$ -Refer to Table 10.1, which shows the aggregate demand and aggregate supply in an economy. What is quantity supplied if the price levels is at 110?

The more the short-run output exceeds an economy's potential, _____

Which of the following is true of the short-run aggregate supply curve?