Exam 14: The Aggregate Model of the Macro Economy

If there is an autonomous decrease in spending (a leftward shift in the aggregate demand curve)and the Fed wishes to hold real income constant,then the Fed would:

Contractionary monetary policy will shift the AD curve rightward.

Increases in autonomous spending cause leftward shifts of the aggregate demand and supply curves.

An open market sale,an increase in the discount rate,and an increase in the reserve requirement would shift the aggregate demand curve leftward.

Discretionary expenditures are federal government expenditures for programs whose funds are authorized and appropriated by Congress and signed by the President,where explicit decisions are made on the size of the programs.

At a given price level,an increase in expected profits and business confidence will shift the aggregate demand curve:

A decrease in personal taxes would shift the aggregate demand curve rightward.

The aggregate supply curve that defines the level of full employment or potential output based on a given amount of resources,efficiency,and technology in the economy is called:

If there is an autonomous increase in spending (a rightward shift in the aggregate demand curve)and the Fed wishes to hold real income constant,then the Fed would:

A decrease in government expenditure would shift the:

Features of the U.S.federal government expenditure and taxation programs that tend to automatically slow the economy during times of high economic activity and boost the economy during periods of recession are called:

A decrease in the currency exchange rate would shift the aggregate demand curve rightward,resulting in a higher equilibrium income and price level in the long-run.

An increase in consumer confidence would shift the:

An open market purchase,a decrease in the discount rate,and a decrease in the reserve requirement would shift the aggregate demand curve rightward.

Decreases in the NAIRU represent a:

Economic variables that generally turn down after a recession begins and turn back up after the recovery starts are called:

If the government spending increases without an equal increase in taxes,the government must borrow funds in the financial markets.

Business debt is an example of a lagging indicator.