Exam 12: The Aggregate-Demandaggregate-Supply Model

In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in money supply shifts the____ curve to the _____.

Aggregate demand tells us

Government spending consitutues about_____ of U.S.economy's aggregate demand.

Suppose an economy is producing an output above its full-employment level.To return the economy to long-run equilibrium, a(n) _____monetary policy can be used, which would cause the price level to ____.

A rise in wealth, everything else remaining unchanged, will cause household investment in housing to

The development of the large structural macroeconomic models was spearheaded by _____economists.

Which of the following is a difference in the views of Keynesian and classical economists?

With the price level measured on the vertical axis and output measured on the horizontal axis, the aggregate-demand curve

If the Fed does not change its monetary policy in an economy that is producing an output lower than the full- employment level of output, the short-run aggregate supply curve will eventually shift____, and the price level will_____.

In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in taxes causes the____ curve to shift_____ .

In some sophisticated macroeconomic models, if monetary policy is used to combat recession, the real interest rate _____, whereas the real interest rate ______if fiscal policy is used.

In the aggregate demand-aggregate supply model, a decrease in the expected price level, everything else remaining unchanged, causes _____to_____ in the short run.

When the price level in an economy declines

Which of the following is true of an economy at full employment?

A rise in the real interest rate, everything else remaining unchanged, will cause business investment spending to

Full-employment output is the amount of output produced when the economy is

Which of the following is an assumption of the aggregate demand-aggregate supply model?

A rise in the incomes of domestic consumers causes net exports to

A rise in the real interest rate will cause consumer spending to

In the aggregate demand-aggregate supply model, an increase in the expected price level, everything else remaining unchanged, causes the _____curve to shift_____ .