Exam 12: Aggregate Demand and Aggregate Supply

Which of the following statements about the multiplier is most accurate?

- Refer to the above diagram. When output decreases from Q₁ and the price level increases from P₁, then this change will:

Which set of events would most likely increase aggregate demand?

The shape of a short-run aggregate supply curve basically depends on what happens to production costs and, therefore, to the prices that businesses must receive to cover costs and make a profit as real domestic output expands.

If the prices of imported resources increase, then aggregate supply will decrease.

A fall in prices of imported resources will cause aggregate:

A graph of the long-run aggregate supply curve is:

Which would be one of the factors that increase aggregate demand?

If Congress raised taxes on businesses, this action would:

An aggregate supply curve shows the:

An increase in aggregate supply increases the real domestic output and reduces the price level effects from an increase in aggregate demand.

Refer to the above graph. Which factor will shift AS₁ to AS₂?

Major increases in oil prices in the mid-1970s and in the late 1970s created:

- Refer to the above graph, which shows an aggregate demand curve for a hypothetical economy. If the price level is 150, the quantity of real GDP demanded is:

Other things being equal, a reorganization of the OPEC cartel to permit it to increase world oil prices by 70 percent would most likely have which effect?

-Refer to the above diagram. Cost-push inflation can be illustrated by a:

The ratchet effect means that:

Aggregate demand is a schedule that shows the various amounts of goods and services that only consumers and businesses desire to purchase at each possible price level.

An increase in net exports reduces aggregate demand.

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