Exam 20: Aggregate Demand and Aggregate Supply

An increase in the actual price level does not shift the short-run aggregate supply curve, but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

The long-run effect of an increase in government spending is to raise

Which of the following shifts both the short-run and long-run aggregate supply right?

The Stock Market Boom of 2015 Imagine that in 2015 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. -Refer to Stock Market Boom 2015. How is the new long-run equilibrium different from the original one?

Tax cuts shift aggregate demand

Which of the following is correct?

Make a list of expenditures whose sum equals GDP.

During recessions unemployment typically rises

Aggregate demand shifts to the left if the money supply increases.

If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds

The recession of 2008-2009 was in many ways the worst macroeconomic event in more than half a century.

John Maynard Keynes advocated policies that would increase aggregate demand as a way to decrease unemployment caused by recessions.

Because the price level does not affect the long-run determinants of real GDP, the long-run aggregate-supply is vertical.

The investment component of GDP measures spending on

The explanations for the slopes of the aggregate demand and short-run aggregate supply curves are the same as the explanations for the slopes of demand and supply curves for specific goods and services.

Illustrate the classical analysis of growth and inflation with aggregate demand and long-run aggregate supply curves.

Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

Other things the same, the aggregate quantity of output supplied will increase if the price level

If aggregate demand shifts right then in the short run

The equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), where a is a positive number, represents