Exam 14: Aggregate Demand and Aggregate Supply

Suppose the economy is in long-run equilibrium.Concerns about pollution cause the government to significantly restrict the production of electricity.At the same time,the value of the dollar falls.What would we expect to happen in the short run?

Figure 14-1 -Refer to the Figure 14-1.If the economy starts at A and there is a fall in aggregate demand,what happens to the economy in the long run?

What has been suggested as a cause of the Great Depression?

Make a list of things that would shift the aggregate-demand curve to the right.

Which statement best describes the aggregate demand and aggregate supply model?

Which of the following shifts aggregate demand to the right?

Suppose the economy is in long-run equilibrium.Premier Aviary succeeds in getting a major new highway project for his province.At the same time,Premier Green succeeds in getting major new restrictions on logging enacted for her province.In the short run,what would we expect to happen?

Which statement best describes the effects of a fall in the price level?

According to the sticky-price theory,which statement is consistent with a more-than-expected rise in the price level?

Other things the same,a decrease in the price level makes the interest rate increase,which leads to an appreciation of the dollar in the foreign-currency exchange.

Which statement is consistent with an increase in the price level?

In response to a decrease in output,the economy would revert to its original level of prices and output whether the decrease in output was caused by a decrease in aggregate demand or a decrease in aggregate supply.

Like real GDP,investment fluctuates,but investment fluctuates by a larger percentage.

What does the economy experience during a recession?

Which of the following is NOT an explanation for the instability of oil prices?

According to the sticky-wage theory,which statement is consistent with a more-than-expected increase in the price level?

What has been suggested as a reason for the severity of the Great Depression?

What does the downward slope of the aggregate-demand curve show?

What could create an increase in the price level and a reduction in real GDP?

Suppose the economy is in long-run equilibrium.If there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers,what would we expect to happen in the short run?