Exam 13: Aggregate Demand and Aggregate Supply Analysis

Which of the following is not a reason why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services?

Suppose the U.S.GDP growth rate is slower relative to other countries' GDP growth rates.This will

Why does the short-run aggregate supply curve slope upward?

Potential GDP refers to the level of

The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time.

Proponents of the real business cycle model argue that the short-run aggregate supply curve is

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing slower than potential real GDP?

Which of the following would cause the short-run aggregate supply curve to shift to the left?

If rapid increases in oil prices caused price levels to increase and real GDP to decrease in the short run,the economy would experience

A decrease in aggregate demand causes a decrease in ________ only in the short run,but causes a decrease in ________ in both the short run and the long run.

The international trade effect states that

At a short-run macroeconomic equilibrium,real GDP is always equal to potential GDP.

Stagflation occurs when inflation ________ and GDP ________.

Which of the following best describes the "wealth effect"?

An increase in the price level results in a(n)________ in the quantity of real GDP demanded because ________.

All of the following would be considered a positive addition to household wealth except

Figure 13-4 -Refer to Figure 13-4.Given the economy is at point A in year 1,what will happen to the unemployment rate in year 2?

An increase in the price level will

Figure 13-3 -Refer to Figure 13-3.Suppose the economy is at point C.If investment spending decreases in the economy,where will the eventual long-run equilibrium be?

Article Summary According to the International Energy Agency (IEA), increased oil production resulting from U.S. shale oil has invigorated the North American oil industry and has created a global supply shock. The shale oil and gas industry has generated tens of billions of dollars in revenues and hundreds of thousands of new jobs, and could result in the United States changing from being the world's largest oil importer to a net exporter within a few years. An IEA forecast predicts that because of shale oil, the United States will become the world's largest oil producer by 2017, with supply growing by 3.9 million barrels per day from 2012-2018. Source: Denise Roland, and AFP, "US shale energy creates global oil 'supply shock'," Telegraph, May 14, 2013. -Refer to the Article Summary.The supply shock mentioned in the article summary may well result in a decrease in the price of oil.After an unexpected decrease in the price of oil,the long-run adjustment ________ the price level and ________ the unemployment rate as they return to their original levels.