Exam 11: Classical and Keynesian Macro Analyses

Which of the following is NOT a reason why real GDP can be expanded beyond a level consistent with its long-run growth path in modern Keynesian analysis?

The condition of fully flexible wages and prices was assumed by

Regarding unemployment, the classical model implies that

The aggregate supply curve in the classical model is

An economy in long-run equilibrium experiences an increase in aggregate demand. According to the classical model,

-In the above figure, if the relevant aggregate demand curve is AD₂, what are the short-run equilibrium price level and real GDP?

The gap that exists when equilibrium real Gross Domestic Product (GDP) is greater than full employment real Gross Domestic Product (GDP) is called a(n)

If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that

According to Keynes, once a system attains an economy-wide equilibrium,

According to classical theory, total employment and real Gross Domestic Product (GDP) are

According to classical theory, a shift in aggregate demand will affect

Say's law explains

In economics, investment is defined as

Suppose the U.S. dollar weakens against the euro (and against other major currencies). This weakening of the dollar will cause which of the following to occur?

-Refer to the above figure. Suppose we are at E and the dollar weakens. Which aggregate supply curve must apply if the price level increases?

Which of the following decreases aggregate supply?

Which of the following is a true statement?

Keynes argued that I. Capitalism did not always lead to full employment. II) Nominal prices were more important than relative prices.

The Keynesian contention that the short-run aggregate supply curve is horizontal is based on the assumption that there are

Cost-push inflation occurs