Exam 10: Aggregate Supply and Aggregate Demand

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result,people will buy ________ Indian-made goods and there will be a movement ________ along India's aggregate demand curve.

In November,2012,U.S.lawmakers were faced with a "fiscal cliff:" if they did not agree on how to reduce the federal deficit,automatic tax increases and drastic cuts in government spending would take effect. What would be the result if the fiscal cliff occurred?

In the short run,the equilibrium level of real GDP

Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future.There is

-In the above figure,the short-run aggregate supply curve is SAS and the aggregate demand curve is AD.A recessionary gap exists

The SAS curve and the LAS curve

In the United States,of the following decades inflation was highest during the ________.,

One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises,

In the short-run,real GDP can be greater than or less than potential GDP because in the short run the money wage rate is fixed.

-In the above figure,if the economy is at point a,an increase in ________ will move the economy to ________.

In the first half of 2008,food and energy costs in the United States increased.At the same time,the financial crisis slowed production as firms predicted lower profits. A ________ macroeconomist would support the use of ________.

Real GDP supplied Price level Real GDP demanded (dollars) Short run (dollars) Long run (dollars) 90 700 300 600 100 600 400 600 110 500 500 600 120 400 600 600 -The table above gives the aggregate demand and aggregate supply schedules in Lotus Land.With no changes in aggregate demand or long-run aggregate supply,in long-run macroeconomic equilibrium,the price level will be ________ and real GDP will be ________.

How does the aggregate demand curve reflect an increase in aggregate demand?

Suppose the exchange rate falls from $1.20 Canadian per U.S.dollar to $1.10 Canadian per U.S.dollar.U.S.exports will ________,U.S.imports will ________,and U.S.aggregate demand will ________.

-In the above figure,which movement illustrates the impact of a rising price level and a constant money wage rate?

A decrease in foreign incomes

Which of the following changes while moving along the aggregate demand curve?

A change in the full-employment quantity of labor ________ the short-run aggregate supply curve and ________ the long-run aggregate supply curve.

-If the actual real GDP is less than potential real GDP,the economy is

-In the above figure,the economy is at point A when changes occur.If the new equilibrium has a price level of 100 and real GDP of $12.0 trillion,then it must be the case that