Exam 9: Aggregate Demand and Supply

An increase in investment will cause the aggregate demand curve to shift to the right.

If the intersection of the short-run aggregate supply and the aggregate demand curves also intersects the long-run aggregate supply curve,then the economy is:

______ are components of consumer spending that affect aggregate demand.

_____ will most likely increase the economy's long-run aggregate supply.

Determinants of short-run aggregate supply include the components of GDP: consumption,investment,government spending,and net exports.

In macroeconomics,the long run is:

An increase in productivity,a decrease in taxes,and reduced regulation all shift aggregate supply to the right.

A(n)_______ in productivity and a(n)______ in taxes will shift short-run aggregate supply to the right.

According to John Maynard Keynes,what determines employment and income?

Increased taxes will shift the aggregate demand curve to the _____ and _____ output demanded.

Hypothetically speaking,if the Organization of Petroleum Exporting Countries stopped exporting oil,a decrease in production would lead to a decrease in aggregate supply.

If the U.S.aggregate price level rises:

The 1973 oil price shock was an example of cost-push inflation.

During cost-push inflation,aggregate output _______ and the aggregate price level _________.

An increase in net export spending will result in a(n):

The concept of the vertical long-run aggregate supply curve is inconsistent with the classical model.

One reason real output declines when the aggregate price level rises is the reduction in the purchasing power of money.

The situation when aggregate demand expands so much that equilibrium output exceeds full employment output and the price level rises is known as ________ inflation.

Describe demand-pull inflation if the economy begins in long-run equilibrium at full employment.Draw a graph to support your response.

In the short run,a decrease in market power (or monopolization):