Exam 13: Aggregate Demand and Aggregate Supply

A disaster that destroys a large part of current agricultural output will not change LRAS, while a disaster that destroys the capital stock in a major city will reduce LRAS.

Faster growth rates by a major trading partner, combined with an increase in stock market wealth, would have what effect on aggregate demand?

The long-run level of RGDP changes whenever the aggregate demand curve shifts.

A price index creates a measure of how many dollars it would take to maintain a constant purchasing power over time.

Differentiate between personal income and disposable personal income.

Using the expenditure approach, calculate GDP using the following data. Item Amount in dollars (billions) Consumption 7,600 Consumption of Durable Goods 1,600 Consumption of Nan Durable Gaods 2,800 Cansumptian of Services 3,200 Investment 2,750 Fixed Investment 1,000 Government purchases af Goods \& Services 1,675 Govermment Transfer Payyents 450 Exgarts 750 Imparts 1,600 GDP Equals

In the simple circular flow model of the economy, total expenditures on goods and services equal total household income.

Ceteris paribus, which of the following would cause the aggregate demand curve to shift to the left?

Ultimately, productivity growth is the major determinant of a country's standard of living

Both short- and long-run aggregate supply curves can shift to the right if entrepreneurial activities lower costs of production and expand what can be produced.

What is the underground economy? How does it affect GDP calculations? Provide three examples of underground economy transactions.

As the price level decreases, money demand (money supply unchanged.____, interest rates ____, investments ____, and the quantity of RGDP demanded ____.

What would happen to the price level, real output, and unemployment in the short run if world oil prices rose sharply?

Which of the following increases U.S.aggregate demand?

If the price level in the United States increases, domestic goods will become relatively more expensive than foreign goods.Consumers will import more and reduce the quantity of domestic goods and services they buy.

The interest rate effect suggests that the negative slope of the aggregate demand curve results at least in part because changes in the price level affect:

How precise is the aggregate supply and demand model?

If exports and imports both fell, but exports fell less than imports,

The general shape of the short-run aggregate supply curve is:

The higher opportunity cost of obtaining an education in developing countries is one of the reasons that school enrollments are lower.