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

For the following question(s),assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below. Figure 10-19 -Refer to Figure 10-19.Good weather allows agricultural output to double.

Which of the following factors would increase aggregate demand in the goods and services market?

During 2003-2007,the price of crude oil increased substantially on the world market.Other things constant,how will an unanticipated increase in oil prices influence the general level of prices and real output of oil-importing nations such as the United States and Japan?

Use the figure below to answer the following question(s). Figure 10-4 -Starting from long-run equilibrium at point F in Figure 10-4,at which of the following points would short-run equilibrium occur following a decrease in resource prices?

If a market economy was in a recession,which of the following would help direct it back toward the full employment rate of output?

If improvements in education and training programs increased the productivity of persons in the labor force,

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

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

Which of the following will most likely accompany an unanticipated increase in aggregate demand?

In the aggregate demand/aggregate supply model,an increase in a country's sustainable potential output is represented by an increase in

Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?

Figure 10-18 -Beginning from a point of short-run equilibrium at point E₂ in Figure 10-18,the economy's movement to a new position of long-run equilibrium from that point would best be described as

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

Which of the following is most likely to accompany an unanticipated increase in short-run aggregate supply?

Figure 10-13 -In Figure 10-13,which of the following would most likely cause the movement from point e₂ to point E₂?

Within the AD/AS model,an increase in capital formation that permits the economy to achieve a larger output will

How will an increase in the world price of crude oil influence the economy of an oil-importing country such as the United States?

Use the figure below to answer the following question(s). Figure 10-16 -With the passage of time,which of the following will help direct this economy in Figure 10-16 toward its potential long-run rate of output?

When the economy is operating at an output rate less than full-employment capacity,

Which is most likely to cause a temporary spurt in the growth of GDP that cannot be maintained in the long run?