Exam 33: Aggregate Demand and Aggregate Supply

Suppose that a decrease in the demand for goods and services pushes the economy into recession.What happens to the price level? If the government does nothing,what ensures that the economy still eventually gets back to the natural rate of output?

Other things the same,as the price level falls,which of the following increases?

Which of the following is correct concerning recessions?

Other things the same,as the price level rises,the real value of money

During recessions

Imagine two economies that are identical except that for a long time,economy A has had a money supply of $500 billion while economy B has had a money supply of $1,000 billion.It follows that

Real GDP

An economic contraction caused by a shift in aggregate demand causes prices to

Which of the following has been suggested as a cause of the Great Depression?

Make a list of things that would shift the long-run aggregate supply curve to the right.

Consumption would decrease and aggregate demand would shift

At the end of World War II many European countries were rebuilding and so were eager to buy capital goods and had rising incomes.We would expect that the rebuilding increased aggregate demand in

The long-run aggregate supply curve would shift right if the government were to

Other things the same,as the price level falls,the real value of a dollar

Which of the following shifts long-run aggregate supply right?

Which of the following would cause prices to fall and output to rise in the short run?

Other things the same,a decrease in the U.S.price level leads to

Which of the following would shift long-run aggregate supply to the right?

In 1936,John Maynard Keynes published a book,The General Theory,which attempted to explain

The initial impact of an increase in an investment tax credit is to shift