Exam 10: Aggregate Supply and Aggregate Demand

In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would

The long-run aggregate supply curve is vertical at $16 trillion but the short-run aggregate supply curve intersects the aggregate demand curve at $17 trillion. We know that

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result, people will buy ________ Indian-made goods and there will be a movement ________ along India's aggregate demand curve.

-The data in the above table indicate that the economy will be in a short-run macroeconomic equilibrium at a price level

-In the above figure, if the economy is at point A, which of the following is TRUE?

Last year in the country of Union, the price level increased and real GDP increased. Such an outcome might have occurred because short-run aggregate supply ________ and aggregate demand ________.

When talking about aggregate supply, it is necessary to

According to www.oecd.org, the United States spends a larger portion of expenditures on higher education compared to any other country. Increasing the amount of higher education produces I.rightward shifts in the U.S. long-run aggregate supply curve. II.movements up along the U.S. aggregate demand curve. III.increases in U.S. human capital.

A decrease in the price level accompanied by no change in the money wage rate leads to ________ movement along the ________ aggregate supply curve.

What happens to the aggregate demand curve in the United States if the exchange rate increases so that U.S.-made products become more expensive?

For movements along the long-run aggregate supply curve

The long-run aggregate supply (LAS)curve

The long-run aggregate supply curve is vertical.

Which school of thought believes that real GDP always equals potential GDP?

When real GDP exceeds potential GDP, then the economy has

A fall in the money wage rate shifts

-If real GDP is less than potential GDP, the economy is

What are the substitution effects that affect aggregate demand?

If the world economy expands so that foreign demand for U.S.-made goods increases, in the short run what will happen to aggregate demand, the price level, and real GDP in the U.S.?

Economic growth is best defined as