Exam 9: Aggregate Demand and Aggregate Supply Analysis

Why is the business cycle so important to Canadian National Railway?

Which of the following would cause the short-run aggregate supply curve to shift to the left?

Higher personal income taxes

Workers and firms both expect that prices will be 3% higher next year than they are this year.As a result,

A decrease in the price level results in a(n)________ in the quantity of real GDP demanded because a lower price level ________ consumption, investment, and net exports.

Falling oil prices made consumers in Alberta very pessimistic about their future incomes.How will this increased pessimism affect the aggregate demand curve?

If potential GDP is equal to $600 billion, what does the long-run aggregate supply curve look like?

Potential GDP refers to the level of

A decrease in investment causes the price level to ________ in the short run and ________ in the long run.

Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP.Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?

Stagflation is often a result of

An increase in the price level will

Spending on the peace keeping missions is essentially categorized as government purchases.How do increases in spending on peace keeping affect the aggregate demand curve?

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, an increase in the price level would be represented by a movement from

If the Canadian dollar increases in value relative to other currencies, how does this affect the aggregate demand curve?

Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run.

If technological change occurs in the economy,

A decrease in the price level will

After an unexpected increase in the price of oil, the long-run adjustment ________ the price level and ________ the unemployment rate as they return to their original levels.

The long-run aggregate supply curve shows the relationship between