Exam 12: Aggregate Demand and Aggregate Supply

An increase in investment spending leads to _____ in the price level and _____ in real GDP in the short run.

Use the following to answer questions: -An inflationary gap is automatically closed by _____ wages that shift the SRAS curve _____.

As an inflationary gap self-corrects,the equilibrium price level _____ and the equilibrium real output _____.

Use the following to answer questions: -(Figure: AD-AS Model I)Refer to Figure: AD-AS Model I.If the economy is at point X,there is a(n)_____ gap with _____ unemployment.

The aggregate demand curve slopes:

Between 1929 and 1933,the Canadian economy moved upward from left to right along its short-run aggregate supply curve.

An increase in government spending on health care is likely to shift the _____ curve to the _____.

The end of the Great Depression was due largely to increased government spending for World War II.

If it costs Betsy $10 to bake a cake and she sells the cake for $25,her profit per unit (per cake)is $35.

When the economy is on the short-run aggregate supply curve and to the left of the long-run aggregate supply curve,actual aggregate output will eventually equal potential output as _____ fall(s)and the _____ aggregate _____ curve shifts to the _____.

The aggregate demand curve is negatively sloped in part because of the impact of interest rates on:

The aggregate supply curve shows the relationship of prices to:

Which factor is one of the reasons that the aggregate demand curve slopes downward?

The positive relationship between the aggregate price level and aggregate output supplied gives the short-run aggregate supply curve a _____ slope.

An increase in the price of imported oil leads to a _____ shock.

In 1979 and 1980,because of the interest rate and wealth effects,the economy was moving upward along the aggregate demand curve from right to left.

Because of the multiplier effect,an increase in government spending of $200 billion will increase aggregate output by less than that amount.

Besides consumption,the component(s)of aggregate demand is/are:

Increasing the quantity of money in circulation shifts the _____ curve to the _____.

A decrease in the money supply is likely to cause a(n)_____ in borrowing,a(n)_____ in interest rates,and a(n)_____ in aggregate demand.