A) is the level of output that the economy would produce if all prices,including nominal wages,were fully flexible. B) varies with the price level. C) depends on the level of consumer confidence. D) is greater in periods of expansion than in recessions. A) is the level of output that the economy would produce if all prices,including nominal wages,were fully flexible. B) varies with the price level. C) depends on the level of consumer confidence. D) is greater in periods of expansion than in recessions.

Exam 12: Aggregate Demand and Aggregate Supply

The economy is in short-run macroeconomic equilibrium when the quantity of aggregate output supplied is equal to the quantity of aggregate output demanded.

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(True/False)

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Question 1

Correct Answer:

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True

Use the following to answer questions: -When the economy is in a recessionary gap,the government can improve economic outcomes by:

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(Multiple Choice)

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Question 2

Correct Answer:

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When the price level increases,firms in imperfectly competitive markets usually have a decrease in profit per unit and decrease output.

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(True/False)

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Question 3

Correct Answer:

Verified

False

Because the aggregate price level has no effect on aggregate output in the long run,the long-run aggregate supply curve is:

(Multiple Choice)

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Question 4

Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.If the economy is in short-run equilibrium at Y₁ in panel (a),to return to potential output at Y_P policy makers should use:

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Question 5

Use the following to answer questions: -(Figure: An Increase in Aggregate Demand)Refer to Figure: An Increase in Aggregate Demand.The short-run equilibrium at Y₂ and P₂:

(Multiple Choice)

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Question 6

The aggregate supply curve shows the relationship between the aggregate price level and the aggregate:

(Multiple Choice)

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Question 7

The interest rate effect is the tendency for changes in the price level to affect:

(Multiple Choice)

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Question 8

When the aggregate price level rises:

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Question 9

If the economy is in a recessionary gap:

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Question 10

Suppose that consumer expectations improve.The aggregate demand curve will undergo a:

(Multiple Choice)

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Question 11

Suppose the economy is operating in long-run equilibrium and a positive demand shock hits.We expect a short-run increase in real GDP and the price level and a long-run _ in real GDP and _ in the price level.

(Multiple Choice)

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Question 12

Potential output:

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Question 13

The wealth effect is reflected in:

(Multiple Choice)

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Question 14

The short-run aggregate supply curve slopes upward because of:

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Question 15

According to the wealth effect,when prices decrease,the purchasing power of assets _ and consumer spending _.

(Multiple Choice)

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Question 16

Which factor would shift the aggregate demand curve to the LEFT?

(Multiple Choice)

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Question 17

The wealth effect suggests:

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Question 18

Aggregate demand will shift to the RIGHT if:

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Question 19

Use the following to answer questions: -(Figure: Aggregate Supply)Refer to Figure: Aggregate Supply.If the economy is at point E,nominal wages will ___,and the short-run aggregate supply curve will shift _ until actual output is ___ potential output.

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Question 20

Showing 1 - 20 of 345

The economy is in short-run macroeconomic equilibrium when the quantity of aggregate output supplied is equal to the quantity of aggregate output demanded.

Use the following to answer questions: -When the economy is in a recessionary gap,the government can improve economic outcomes by:

When the price level increases,firms in imperfectly competitive markets usually have a decrease in profit per unit and decrease output.

Because the aggregate price level has no effect on aggregate output in the long run,the long-run aggregate supply curve is:

Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.If the economy is in short-run equilibrium at Y₁ in panel (a),to return to potential output at Y_P policy makers should use:

Use the following to answer questions: -(Figure: An Increase in Aggregate Demand)Refer to Figure: An Increase in Aggregate Demand.The short-run equilibrium at Y₂ and P₂:

The aggregate supply curve shows the relationship between the aggregate price level and the aggregate:

The interest rate effect is the tendency for changes in the price level to affect:

When the aggregate price level rises:

If the economy is in a recessionary gap:

Suppose that consumer expectations improve.The aggregate demand curve will undergo a:

Suppose the economy is operating in long-run equilibrium and a positive demand shock hits.We expect a short-run increase in real GDP and the price level and a long-run _ in real GDP and _ in the price level.

Potential output:

The wealth effect is reflected in:

The short-run aggregate supply curve slopes upward because of:

According to the wealth effect,when prices decrease,the purchasing power of assets _ and consumer spending _.

Which factor would shift the aggregate demand curve to the LEFT?

The wealth effect suggests:

Aggregate demand will shift to the RIGHT if:

Use the following to answer questions: -(Figure: Aggregate Supply)Refer to Figure: Aggregate Supply.If the economy is at point E,nominal wages will ___,and the short-run aggregate supply curve will shift _ until actual output is ___ potential output.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Exam 12: Aggregate Demand and Aggregate Supply

The economy is in short-run macroeconomic equilibrium when the quantity of aggregate output supplied is equal to the quantity of aggregate output demanded.

Use the following to answer questions: -When the economy is in a recessionary gap,the government can improve economic outcomes by:

When the price level increases,firms in imperfectly competitive markets usually have a decrease in profit per unit and decrease output.

Because the aggregate price level has no effect on aggregate output in the long run,the long-run aggregate supply curve is:

Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.If the economy is in short-run equilibrium at Y1 in panel (a),to return to potential output at YP policy makers should use:

Use the following to answer questions: -(Figure: An Increase in Aggregate Demand)Refer to Figure: An Increase in Aggregate Demand.The short-run equilibrium at Y2 and P2:

The aggregate supply curve shows the relationship between the aggregate price level and the aggregate:

The interest rate effect is the tendency for changes in the price level to affect:

When the aggregate price level rises:

If the economy is in a recessionary gap:

Suppose that consumer expectations improve.The aggregate demand curve will undergo a:

Suppose the economy is operating in long-run equilibrium and a positive demand shock hits.We expect a short-run increase in real GDP and the price level and a long-run _____ in real GDP and _____ in the price level.

Potential output:

The wealth effect is reflected in:

The short-run aggregate supply curve slopes upward because of:

According to the wealth effect,when prices decrease,the purchasing power of assets _____ and consumer spending _____.

Which factor would shift the aggregate demand curve to the LEFT?

The wealth effect suggests:

Aggregate demand will shift to the RIGHT if:

Use the following to answer questions: -(Figure: Aggregate Supply)Refer to Figure: Aggregate Supply.If the economy is at point E,nominal wages will _____,and the short-run aggregate supply curve will shift _____ until actual output is _____ potential output.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.If the economy is in short-run equilibrium at Y₁ in panel (a),to return to potential output at Y_P policy makers should use:

Use the following to answer questions: -(Figure: An Increase in Aggregate Demand)Refer to Figure: An Increase in Aggregate Demand.The short-run equilibrium at Y₂ and P₂:

Suppose the economy is operating in long-run equilibrium and a positive demand shock hits.We expect a short-run increase in real GDP and the price level and a long-run _ in real GDP and _ in the price level.

According to the wealth effect,when prices decrease,the purchasing power of assets _ and consumer spending _.

Use the following to answer questions: -(Figure: Aggregate Supply)Refer to Figure: Aggregate Supply.If the economy is at point E,nominal wages will ___,and the short-run aggregate supply curve will shift _ until actual output is ___ potential output.