Exam 12: The Aggregate-Demandaggregate-Supply Model

In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in capital stock shifts the_____ to the_____ .

Suppose increased costs for security raised the costs of production for all firms.Explain how this would affect aggregate supply, output, and the price level in the short run and the long run.

When all capital and labor are fully utilized, the economy is said to be

If an economy is in a recession, with output below its full-employment level, a(n) ______ to return the economy to its long-run equilibrium, which would cause the price level to_____

Describe the effect of expansionary monetary policy in a recession.Contrast the results with no monetary policy action.