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

If an economy operates at a short-run equilibrium output that exceeds its long-run capacity, which of the following will be most likely to direct the economy toward full employment?

If European economies experience strong economic growth, U.S. net exports will

Once decision makers fully adjust to an increase in the general price level,

If an unanticipated increase in aggregate demand results in an output beyond the economy's long-run capacity, long-run equilibrium will eventually be restored by

Within the framework of the AD/AS model, if consumers and investors become more pessimistic about the future direction of the economy, this will lead to a(n)

If the general level of prices is lower 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?

An increase in capital formation that expands long-run aggregate supply will

If an unanticipated reduction in aggregate demand throws a market economy into a recession,

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

Which of the following statements is most consistent with the view that the economy has a self-corrective mechanism?

Which of the following will most likely cause an increase (shift to the right) in both the long-run and short-run aggregate supply curves?

Use the figure below to answer the following question(s). Figure 10-4 -Starting from long-run equilibrium at point F in Figure 10-4, at which of the following points would short-run equilibrium occur following a decrease in resource prices?

Use the figure below to answer the following question(s). Figure 10-16 -Suppose an economy is currently operating at output Y₁ associated with AD₁ and SRAS₁, shown in Figure 10-16. Initially, the output of this economy is

Which of the following would be most likely to cause a reduction in current aggregate demand in the United States?

For the following changes in the economy, indicate whether short-run aggregate supply or long-run aggregate supply will be affected. Indicate the direction of the change. a.an improvement in manufacturing technology b.an increase in the world price of antimony (a chemical that the U.S. imports) c.a bumper potato crop in the southern "potato belt"

If a reduction in stock prices reduces the real wealth of Americans, the

The usual results of an adverse supply shock are

If an economy was initially in long-run equilibrium, an unanticipated increase in aggregate demand will tend to cause

If the U.S. price level decreased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

A rise in the price of oil would be most likely to cause which of the following in the United States?