Exam 10: Real GDP and the Price Level in the Long Run

If the economy grows steadily over several years and at the same time maintains the aggregate demand curve in its present position, then the economy will experience which of the following?

What are the three forces that cause the aggregate demand curve to slope down? Explain.

Which of the following will NOT cause a leftward shift in the Long-Run Aggregate Supply curve?

When expenditures change due to changes in the real value of money caused by variations in the price level, this is known as the

The position of the long-run aggregate supply curve is determined by

Which of the following will NOT shift the aggregate demand curve?

When prices increase, the real interest rate

The real-balance effect implies that when

What is the aggregate demand curve and what does it represent?

An economy experiences real growth over time with stable aggregate demand. This would likely result in

The horizontal axis for an aggregate demand curve measures

An increase in total planned real expenditures that is caused by a factor other than the price level will lead to the

What is measured on the vertical axis of the aggregate demand/aggregate supply model?

"The aggregate demand curve slopes down for the same reason that the individual demand curve for a good slopes down." Do you agree or disagree with this statement? Why?

An individual holds $10,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect

To find an economy's long-run equilibrium price level, locate the point where ________ and ________ cross and look to the left.

-Refer to the above figures. Which panel(s) represent the effect of an increase in the price level?

Which of the following is true about how the aggregate demand curve differs from the individual's demand curve?

The open economy effect suggests that

A country's long-run aggregate supply curve will shift to the left when there is (are)