Exam 6: Modelling Real Gdp and the Price Level in the Long Run

What happens when economic growth occurs without a corresponding increase in aggregate demand?

An individual holds $10 000 in a non-interest-earning checking account,and the overall price level rises significantly.Other things constant,we would expect

The horizontal axis for an aggregate demand curve measures

A non-price level change that increases aggregate spending on domestic goods will

What is the real-balance effect of an increase in the price level?

A price level increase tends to reduce net exports,thereby reducing the amount of real goods and services purchased in Canada.Economists refer to this phenomenon as

Explain in detail how the multiplier effect assists in determining the price level in the long run.

When the relative prices of Canadian-made goods go up,the result is

If you have $1 000 and the GDP deflator increases from 112 to 120,then

A reduction in the quantity demanded of interest-rate-sensitive goods as a result of an increase in the price level,if other factors are held constant,is known as

Which of the following statements is TRUE?

Other things constant,the economy's aggregate demand curve shows that

Figure 6-1 -In Figure 6-1,a movement from point A to point B can be explained by

One reason that the aggregate demand curve slopes downward is because

Over time in a growing economy,the long-run aggregate supply curve will

Leftward shifts in long-run aggregate supply

Persistent inflation in an economy is only possible if

According to the interest rate effect,an increase in the price level,if other factors are held constant,will lead to

Which of the following would cause aggregate demand to decrease?

Explain how aggregate demand fluctuations create price level increases in the long run only.