Exam 20: Aggregate Demand and Aggregate Supply: Two Causes of Economic Fluctuations

Suppose the economy is in long-run equilibrium.In a short span of time,there is a sharp increase in the supply of labor,a major new discovery of oil,and new environmental regulations that raise the cost of electricity production.In the short run

Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. -Refer to Optimism.In the long run,the change in price expectations created by optimism shifts

Which of the following by itself is consistent with the directions that the price level and real GDP changed at the onset of the Great Depression?

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4.If the economy starts at A and there is a fall in aggregate demand,the economy moves

Suppose the economy is in long-run equilibrium.Senator A succeeds in getting taxes raised.At the same time,Senator B succeeds in getting major restrictions on logging removed.In the short run

If aggregate demand shifts right then in the short run

The recessions of the 1970s are often attributed to

In which case can we be sure that real GDP and the price level rise in the short run?

Stagflation exists when prices

An economic expansion caused by a shift in aggregate demand remedies itself over time as the expected price level

Keynes believed that economies experiencing high unemployment should adopt policies to

Suppose that during the Great Depression long-run aggregate supply shifted left.To be consistent with what happened to the price level and output,what would have had to happen to aggregate demand?

Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. -Refer to Stock Market Boom 2015.Which curve shifts and in which direction?

Suppose the economy is in long-run equilibrium.In a short span of time,there is a large influx of skilled immigrants,a major new discovery of oil,and a major new technological advance in electricity production.In the short run,we would expect

Which of the following would cause prices and real GDP to rise in the short run?

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4.A decrease in taxes would move the economy from C to

If there are floods or droughts or a decrease in the availability of raw materials

Which of the following did not happen during the onset of the Great Depression?

Suppose the economy is in long-run equilibrium.Concerns about pollution cause the government to significantly restrict the production of electricity.At the same time,taxes fall.In the short-run

Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. -Refer to Stock Market Boom 2015.What happens to the expected price level and what impact does this have on wage bargaining?