Exam 13: Aggregate Demand and Aggregate Supply Analysis

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from

After an unexpected ________ in the price of oil,the long-run adjustment decreases the price level and ________ the unemployment rate as they return to their original levels.

Inflation is generally the result of total spending growing faster than total production.

Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run.

Long-run macroeconomic equilibrium occurs when

Starting from long-run equilibrium,use the basic aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth.

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,an increase in the expected future price level would be represented by a movement from

The level of aggregate supply in the long-run is not affected by

German luxury car exports were hurt in 2009 as a result of the recession.How would this decrease in exports have affected Germany's aggregate demand curve?

Which of the following would cause the short-run aggregate supply curve to shift to the right?

Which aggregate supply curve has a positive slope?

The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time.

The process of an economy adjusting from a recession back to potential GDP in the long run without any government intervention is known as

The short-run aggregate supply curve has a(n)________ slope because as prices of ________ rise,prices of ________ rise more slowly.

What variables cause the short-run aggregate supply curve to shift? For each variable,identify whether an increase in that variable will cause the short-run aggregate supply curve to shift to the right or to the left.

Changes in the price level

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

A decrease in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?

Which of the following is considered a negative supply shock?

When people became less concerned with the underlying value of their houses and instead focused on the expectations of the prices of their houses increasing,________ occurred.