Exam 22: Aggregate Demand and Supply Analysis

The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse,a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is an appropriate description of the mechanism that would have ensued?

The Phillips curve indicates that when the labor market is ________,production costs will ________ and aggregate supply increases.

Everything else held constant,an autonomous monetary policy tightening ________ aggregate ________.

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant,the development of a new,more productive technology will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run.

Suppose the U.S. economy is producing at the natural rate of output. An appreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant. (Assume the appreciation causes no effects in the supply side of the economy. )

Using the aggregate demand-aggregate supply model,explain and demonstrate graphically the short-run and long-run effects of an increase in the money supply.

The long-run aggregate supply curve is a vertical line passing through

The short-run aggregate supply curve shifts to the right when

Suppose the economy is producing at the natural rate of output. A decrease in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.

A positive spending shock ________ real interest rates and ________ output in the short run,thereby its effect on stock prices is ________.

positive spending shocks lead to ________ real interest rates ________.

Everything else held constant,which of the following does NOT cause aggregate demand to increase?

According to aggregate demand and supply analysis,America's involvement in the Vietnam War had the effect of

A temporary supply shock that raises prices will cause the real interest rate to

Everything else held constant,a change in workers' expectations about inflation will cause ________ to change.

________ flexible wages and prices imply that the short-run aggregate supply curve is ________.

Everything else held constant,a decrease in net exports ________ aggregate ________.

As of 2009,China's economy had recovered from the global recession that began in 2008. Use aggregate demand and aggregate supply analysis to explain why,and to explain the likely consequences for China of an increase in the growth rate of the global economy.

A negative supply shock causes ________ to ________.

Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Fed will cause ________ in real GDP the the short run and ________ in inflation in the short run,everything else held constant.