Exam 9: Aggregate Demand and Supply

If businesses expect to start earning more profit,what will happen to the aggregate demand curve?

Short-run macroeconomic equilibrium occurs at the intersection of:

According to the wealth effect,as prices fall,people feel wealthier and purchase more goods and services.

Use the following to answer question Figure: Interpreting Aggregate Shifts -(Figure: Interpreting Aggregate Shifts)The graph shows:

Which of the following will shift the short-run aggregate supply curve to the right?

When aggregate prices rise,U.S.goods become more expensive relative to goods from other countries;this leads to an increase in exports.

Ceteris paribis,a decrease in imports will increase aggregate demand.

In the Keynesian model,the price level is ___________;in the aggregate demand and supply model,the price level is _______________.

(Figure: Determining SRAS Shifts) If the government raises taxes or increases regulations,the short-run aggregate supply curve will shift from SRAS₀ to _____ and the price level will be at _____.

The collapse of housing prices in 2006-2011 caused aggregate demand to fall when homeowners increased their savings to offset the drop in the value of their homes.

________ taxes and ________ interest rates in the United States,along with ___________ incomes in other countries,will shift the U.S.aggregate demand curve to the right.

Technological advances increase aggregate supply.

High family debt:

_____ measure(s)the proportion of additional income that consumers spend.

(Figure: Understanding Aggregate Graphs) This economy is currently at point a.This figure depicts an economy:

Suppose the government raises income taxes,so consumers have less take-home pay.This policy action will cause a(n):

The actual price level is determined by:

Rising input prices increase short-run aggregate supply.

The drop in aggregate demand that occurred during the Great Depression caused a drop in real GDP:

Demand-pull inflation occurs when aggregate demand expands so much that equilibrium output exceeds full employment output.