Exam 10: Dynamic Change, Economic Fluctuations, and the Ad-As Model

Use the figure below to answer the following question(s). Figure 10-1 -At which point in Figure 10-1 is the economy at long-run equilibrium?

If the general level of prices is higher than business decision makers anticipated when they entered into long-term contracts for raw materials and other resources, which of the following is most likely to occur?

Which of the following is most likely to result from an unanticipated increase in short-run aggregate supply due to favorable weather conditions in agricultural areas?

Which of the following contributed to the sharp economic downturn during 2008?

A large grain crop resulting from favorable weather conditions would shift which of the following curves?

Figure 10-18 -As shown in Figure 10-18, the economy's point of short-run equilibrium, given by the shift of the aggregate demand curve from AD₁ to AD₂, is

Which of the following will most likely increase aggregate supply in the long run?

Which of the following will reduce aggregate demand?

Resource prices will fall and short-run aggregate supply will increase if

If the economy is operating at an output level beyond its full-employment capacity, which of the following would most likely direct the economy back to long-run equilibrium?

Within the AD/AS model, if consumers increase their savings and cut back on their spending, the

Which of the following will most likely increase long-run aggregate supply?

When economic growth (a gradual shift of LRAS to the right) expands the production possibilities of an economy,

An increase in the general level of prices in the goods and services market that is accompanied by a short-run expansion in output is most likely caused by

Use the figure below to answer the following question(s). Figure 10-11 -In Figure 10-11, which of the following would most likely cause the movement from point E₁ to point E₂?

When an economy is experiencing an economic boom and operating beyond its long-run capacity,

During an economic expansion, housing and stock prices generally

If Europe and Japan experience rapid growth in their incomes, other things constant, this will cause a(n)

An unanticipated economic event is a change that

Use the figure below to answer the following question(s). Figure 10-10 -Given the aggregate demand and aggregate supply conditions depicted in Figure 10-10, which of the following will tend to occur?