Exam 24: Aggregate Demand, Aggregate Supply, and Business Cycles

The self-correcting tendency of the economy means that rising inflation eventually eliminates:

An increase in aggregate supply is usually shown by a ______ shift of the AS curve.

When the inflation rate increases,PAE ______,which in turn causes Y to ______ because of ______.

A circle of low expected inflation leads to ____ increases in wages and costs and to ____ actual inflation.

For a given inflation rate if a resolution of international disputes leads to a cutback in government military spending,then the ______ shifts _____.

The self-correcting tendency of the economy means that falling inflation eventually eliminates:

Starting from potential output,if consumer confidence increases and consumers decide to spend more,then this will shift the ______ curve to the right and generate ______.

Graphically,long-run equilibrium occurs at the intersection of the aggregate demand curve and:

Changes in the expected rate of inflation will:

When actual output exceeds potential output there is ____ output gap and the rate of inflation will tend to ____.

Suppose the economy is currently operating at potential output;a recessionary gap may be caused by each of the following EXCEPT:

A demand shock is a change in planned spending that is:

Suppose the economy is currently operating at potential output;an expansionary gap may be caused by each of the following EXCEPT:

The two negative demand shocks that caused the Great Recession were:

Changes in planned spending that shift the aggregate demand curve are those:

Due to menu costs,many firms in the economy will increase their output:

To achieve long-run equilibrium in an economy with a recessionary gap,without the use of stabilization policy,the inflation rate must:

The AS curve slopes upward because:

As the quality of available resources becomes worse:

A positive demand shock will shift the ______ curve to the ______.