Exam 13: Aggregate Supply and Aggregate Demand

How does a fall in the money wage rate affect the aggregate supply curve?

At a trough in the business cycle, the macroeconomic equilibrium is ________ the level of potential real GDP.

Give examples of factors that decrease aggregate demand.Which way does the aggregate demand curve shift?

An increase in potential GDP ________ aggregate supply and ________.

"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect? Briefly explain your answer.

As the price level rises relative to costs and the real wage rate falls, profits ________ and the number of firms in business ________.

________ increases the quantity of real GDP supplied and is shown as a movement along the AS curve.

If the economy is at macroeconomic equilibrium, then real GDP

Aggregate demand ________ and shifts the AD curve ________ when ________.

During an inflationary gap,

During the late 1960s, U.S.defense spending increased as the United States fought in Vietnam.This increase in government expenditure on goods and services most likely created

Name the four factors of production that determine the quantity of real GDP supplied.Which one fluctuates the most over the course of the business cycle?