Exam 14: A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Beginning from the full-employment level of real GDP,an increase in one of the components of the aggregate demand curve will increase the:

In an economy where nominal incomes adjust equally to changes in the price level,we would expect the long-run aggregate supply curve to be:

Economic growth is represented by a:

Exhibit 14A-2 Macro AD-AS Model -In Exhibit 14A-2,the intersection of AD with SRAS indicates:

Economic growth is represented by a:

Which of the following would cause an increase (rightward shift)in the short-run aggregate supply curve (SRAS)?

In long-run full-employment equilibrium,which of the following is true?

A decrease in the aggregate demand curve along the LRAS curve,all other things unchanged,will generate ____ in potential real GDP and ____ in the price level.

Which of the following causes a leftward shift in the short-run aggregate supply curve?

The short-run aggregate supply curve is:

Exhibit 14A-6 Aggregate demand and supply model -As shown in Exhibit 14A-6,and assuming the aggregate demand curve shifts from AD₁ to AD₂,the full-employment level of real GDP is:

Beginning from a position of long-run equilibrium at the full-employment level of real GDP,the economy's short-run response to an increase in the aggregate demand curve would be:

Exhibit 14A-4 Macro AD-AS Model -In Exhibit 14A-4,the level of real GDP represented by Yp:

As shown in Exhibit 14A-1 and assuming the aggregate demand curve shifts from AD₁ and AD₂ ,the full-employment level of real GDP is:

Exhibit 14A-4 Macro AD-AS Model -In Exhibit 14A-4,point P₂,Y₁ represents:

Along the short-run aggregate supply curve (SRAS),an increase (rightward shift)in the aggregate demand curve will increase:

Beginning from full-employment macro equilibrium,increase in government spending will cause real GDP to:

Exhibit 14A-6 Aggregate demand and supply model -Given the shift of the aggregate demand curve from AD₁ to AD₂ in Exhibit 14A-6,the real GDP and price level (CPI)in long-run equilibrium will be:

Exhibit 14A-5 Macro AD-AS Model -Given the shift of the aggregate demand curve from AD₁ to AD₂ in Exhibit 14A-5,the real GDP and price level (CPI)in long-run equilibrium will be:

A short-run aggregate supply curve (SRAS)assumes: