Exam 11: Aggregate Demand and Supply  

How are the price level and the level of real output affected if aggregate supply increases?

Because individual supply curves slope up, the aggregate supply curve slopes down.

The aggregate demand curve will shift to the left if

Which two sectors of the economy are represented in the circular flow model?

Suppose that, over time, an economy has experienced increases in real income and decreases in the price level. What would account for this?

The downward slope of the aggregate demand curve shows that

The aggregate supply curve slopes up due to the _________ motive.

How is a consumer's purchasing power affected if his money income is stable but the overall price level rises?

Which of the following correctly describes the exchanges depicted in the circular flow model?

Consumers purchase more foreign goods when the domestic price level decreases.

Suppose that, over time, an economy has experienced decreases in real income and increases in the price level. What would account for this?

How is aggregate demand affected if taxes decrease?

How does immigration affect aggregate supply?

A shift in aggregate demand will change the equilibrium price level.

When consumers buy more imported goods in response to increases in the domestic price level, this is known as the

The downward slope of aggregate demand shows that consumers substitute between goods when the relative price of one rises.

How is the equilibrium level of real GDP determined?

Which one of the following would most likely lead to an increase in aggregate supply?

Households receive money income from selling factor services to businesses.

If business inventories accumulate, the _________ _________ eventually will fall.