Exam 12: Aggregate Demand and Aggregate Supply

During the Great Depression,Canada underwent a movement _____ along the short-run aggregate supply curve;during the 1979 oil crisis,Canada underwent a _____ shift in the short-run aggregate supply curve.

In the long run,as the economy self-corrects,a decrease in aggregate demand,all other things unchanged,will cause the price level to _____ and potential output to _____.

Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.The intersection of SRAS with AD in panel (a)indicates an economy:

Potential output would NOT be increased by:

The interest rate effect of a change in the aggregate price level causes the:

An increase in the nominal wage will increase potential output.

Suppose that a presidential candidate who promised large personal income tax cuts is elected.Which outcome is MOST likely?

A change in _____ would cause a shift of the short-run aggregate supply curve.

The purchasing power of money increased during the oil crisis of 1979 because the aggregate price level increased but the growth rate of the money supply was faster than the increase in the price level.

A recessionary gap occurs when:

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

The long run in macroeconomic analysis is a period:

If the aggregate price level rises,holding everything constant,consumers will:

Suppose the equilibrium aggregate price level and the equilibrium level of real GDP are both rising.This is probably the effect of a(n)_____ in aggregate _____.

When demand declined in the Great Depression of 1929-1933,the GDP deflator:

Use the following to answer questions: -An inflationary gap occurs if:

An increase in dental insurance premiums would likely cause a decrease in short-run aggregate supply and shift the short-run aggregate supply curve to the left.

The level of output that the economy would produce if all prices,including nominal wages,were fully flexible is called:

Demand shocks do NOT include a(n):

Stagflation is usually caused by a _____ shock.