Exam 9: Aggregate Demand and Aggregate Supply Analysis

An increase in the price level causes a movement down the aggregate demand curve.

Using an aggregate demand graph, illustrate the impact of an increase in the interest rate.

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

Which of the following is an assumption of the dynamic aggregate demand - aggregate supply model?

Full-employment GDP is also known as

According to the "wealth effect," when the ________ falls, the ________ rises.

If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium,

One factor which brought on the recession of 2008-2009 was the collapse of the U.S.housing bubble.

The aggregate demand curve shows the relationship between the ________ and ________.

An increase in aggregate demand causes an increase in ________ only in the short run, but causes an increase in ________ in both the short run and the long run.

Figure 9.1 Alt text for Figure 9.1: In figure 9.1, a graph comparing real GDP and price level. Long description for Figure 9.1: The x-axis is labelled, real GDP, and the y-axis is labelled, price level, with 0 at the vertex.Line AD1 begins in the top left corner and slopes down to the bottom center.Line AD2 follows the same slope as line AD1 but is plotted to the right.Points A and B are plotted along line AD1.Point A is a little less than half way along the left side of the line, and point B is little more than half way on the right side of the line. -Refer to Figure 9.1.Ceteris paribus, an increase in households' expectations of their future income would be represented by a movement from

Figure 9.1 Alt text for Figure 9.1: In figure 9.1, a graph comparing real GDP and price level. Long description for Figure 9.1: The x-axis is labelled, real GDP, and the y-axis is labelled, price level, with 0 at the vertex.Line AD1 begins in the top left corner and slopes down to the bottom center.Line AD2 follows the same slope as line AD1 but is plotted to the right.Points A and B are plotted along line AD1.Point A is a little less than half way along the left side of the line, and point B is little more than half way on the right side of the line. -Refer to Figure 9.1.Ceteris paribus, a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from

Figure 9.3 Alt text for Figure 9.3: In figure 9.3, a graph comparing real GDP and price level. Long description for Figure 9.3: The x-axis is labelled, real GDP, with 0 at the vertex, and the y-axis is labelled, price level.2 lines are shown; SRAS1 and SRAS2.Line SRAS1 begins a little above the vertex and slopes up to the top right corner.Line SRAS2 follows the same slope as line SRAS1, but is plotted to the right.Points A and B are plotted on line SRAS1.Point A is near the left end of the line and point B is near the center of the line. -Refer to Figure 9.3.Ceteris paribus, a decrease in the capital stock would be represented by a movement from

The level of real GDP in the long run is called

Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment.Which of the following will happen in the short run?

Using an aggregate demand graph, illustrate the impact of an increase in the growth rate of Canadian GDP relative to the growth rate of foreign GDP.

Which of the following is one reason for the decline in aggregate demand that led to the recession of 2008-2009?

Because of the slope of the aggregate demand curve, we can say that

The long-run aggregate supply curve will shift to the right if

When people become ________ concerned with the underlying value of their assets and became ________ concerned with the expectations that the prices of their houses would continue increasing, a housing bubble occurred.