Exam 14: The Aggregate Model of the Macro Economy

A decrease in consumer confidence would shift the aggregate demand curve rightward.

An appreciation of the U.S.dollar would shift the:

An income tax system where higher tax rates are applied to increased amounts of income is called a:

Expansionary fiscal policy will shift the AD curve leftward.

Industrial production is an example of a:

Using the aggregate demand-aggregate supply diagram, graphically illustrate and explain the impact of an escalating budget deficit on the price level and real income in the long-run.

Contractionary fiscal policy should be used if:

The long-run aggregate supply curve is influenced by the price level.

Contractionary monetary policy should be used if:

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

An aggregate supply curve that is either horizontal or upward sloping, depending on whether the absolute price level increases as firms produce more output is called:

The increase in income generated by the additional government expenditure decreases the demand for money.

The horizontal portion of the short-run aggregate supply curve reflects the Keynesian assumption of "sticky" prices.

An increase in resources, efficiency, or technology will shift the:

Depreciation of the U.S.dollar will shift the AD curve leftward.

Explain the long-run consequences of continued increases in the money supply.

An increase in the price level will shift the aggregate demand curve:

An increase in foreign real income would shift the:

The OPEC oil shocks in 1973-1974 are an example of:

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: