Exam 13: Aggregate Demand and Aggregate Supply

Figure 13-2 shows shifts in the aggregate demand curve. Which of the following combinations would be illustrated by a shift in aggregate demand from AD₀ to AD₁?Figure 13-2

Which of the following statements is true?

Jason has been holding his retirement savings in a safe in his house. Currently, the economy is experiencing a falling price level. He can conclude that:

An increase in disposable income would tend to shift the aggregate demand curve to the left.

Which of the following would shift both the short-run aggregate supply curve and the long-run aggregate supply curve of iron and steel industry rightward?

Which of the following would be true of the aggregate demand curve of an economy if investment grew by a smaller magnitude than imports?

Which of the following will cause consumption and, as a result, aggregate demand to decrease?

Stagflation is generally caused by:

An increase in the U.S. price level will:

Which of the following variables changes along the long-run aggregate supply curve?

A fall in the price level will cause the aggregate demand curve to shift to the left.

If there is currently an inflationary gap, an increase in aggregate demand will make the inflationary gap smaller, but a decrease in aggregate demand would make the inflationary gap larger.

Figure 13-9 shows the short-run macroeconomic equilibrium of an economy at Point A. As the economy adjusts from short run equilibrium to long-run equilibrium, _____.Figure 13-9

A change that shifted the long-run aggregate supply curve to the right would not necessarily shift the short-run aggregate supply curve to the right.

Stagflation could be caused solely by a shift in the aggregate demand curve.

Discuss the impact of efficiency wages on unemployment and wage inflexibility.

An unexpected increase in aggregate demand results in a decrease in real wages in the short run.

According to the misperception effect, firms increase output as the price level rises because they mistake the increase in overall prices for an increase in the relative price of their own output.

Economies usually face recessions for long periods of time because:

If some non-price level determinant causes total spending to increase, there will be a(n):