Exam 22: Aggregate Demand and Supply Analysis

Suppose the economy is producing at the natural rate of output.Assuming a fixed natural rate of output and everything else held constant,the development of a new,more productive technology will cause ________ in the unemployment rate in the long run and ________ in the aggregate price level in the short run.

Explain through the component parts of aggregate demand why the aggregate demand curve slopes down with respect to the price level.Be sure to discuss two channels through which changes in prices affect demand.

Everything else held constant,an increase in the cost of production ________ aggregate ________.

Using the aggregate demand-aggregate supply model,explain and demonstrate graphically the short-run and long-run effects of an increase in the money supply.

The Lucas supply function indicates that deviations of unemployment from the natural rate level respond to

Everything else held constant,which of the following does not cause aggregate demand to increase?

If workers demand and receive higher real wages (a successful wage push),the cost of production ________ and the short-run aggregate supply curve shifts ________.

Everything else held constant,aggregate demand increases when

Suppose the economy is producing at the natural rate of output.An open market purchase of bonds by the Fed will cause ________ in real GDP in the long run and ________ in the aggregate price level in the long run,everything else held constant.

By looking at aggregate demand through its component parts,we can conclude that a ________ price level ________ the real quantity of money,________ higher spending.

Suppose the economy is producing at the natural rate of output.Assuming a fixed natural rate of output and everything else held constant,the development of a new,more productive technology will cause ________ in the unemployment rate and ________ in the aggregate price level in the long run.

Everything else held constant,when output is ________ the natural rate level,wages will begin to ________,increasing short-run aggregate supply.

Everything else held constant,an increase in net exports ________ aggregate ________.

The quantity theory of money is derived from

A negative supply shock causes ________ to ________.

A positive supply shock causes ________ to ________.

Suppose the economy is producing at the natural rate of output.An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in the aggregate price level in the long run,everything else held constant.

Everything else held constant,when actual output exceeds the natural rate of output ________ aggregate supply ________.

The aggregate supply curve shows the relationship between

Suppose the U.S.economy is producing at the natural rate of output.An appreciation of the U.S.dollar will cause ________ in real GDP in the short run and ________ in the aggregate price level in the short run,everything else held constant.(Assume the appreciation causes no effects in the supply side of the economy.)