Exam 33: Aggregate Demand and Aggregate Supply

Optimism Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time. -Refer to Optimism.How is the new long-run equilibrium different from the original one?

Which of the following alone can explain the change in the price level and output during World War II?

Sticky nominal wages can result in

Other things the same,an unexpected fall in the price level results in some firms having

If businesses in general decide that they have overbuilt and so now have too much capital,their response to this would initially shift

Optimism Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time. -Refer to Pessimism.In the short run what happens to the price level and real GDP?

Keynes explained that recessions and depressions occur because of

Explain how an increase in the price level changes interest rates.How does this change in interest rates lead to changes in investment and net exports?

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

Which of the following would cause prices to rise and real GDP to fall in the short run?

The effect of an increase in the price level on the aggregate-demand curve is represented by a

Recession come at

The aggregate demand and aggregate supply model implies monetary neutrality

Figure 33-2. -Refer to Stock Market Boom 2014.In the short run what happens to the price level and real GDP?

Which of the following explains why production rises in most years?

In the context of the aggregate-demand curve,the interest-rate effect refers to the idea that,when the price level increases,

Aggregate demand includes

During the last half of 1980,the U.S.unemployment rate was about 7.5 percent.Historical experience suggests that this is

In 2008 due to an economic slowdown and fear of a recession,the government

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