Exam 11: Classical and Keynesian Macro Analyses

A permanent reduction in international trade barriers would

According to the classical model, prices and wages

Both the long-run and short-run aggregate supply curves will shift when

What is the major difference between the classical model and the Keynesian model? Explain.

Saving is a leakage from the circular flow. Why didn't the classical economists think saving might cause consumption expenditures to fall short of total output?

A stronger U.S. dollar leads to ________ in SRAS and ________ in AD simultaneously.

-In the above figure, the inflationary gap can correctly be identified as

The Keynesian contention that the short-run aggregate supply curve is horizontal is based on the assumption that there are

What is the shape of the modern short-run aggregate supply (SRAS) curve? Why?

Demand-pull inflation is

Which of the following is NOT an assumption of the classical model?

Which of the following is NOT an assumption of the classical model?

The classical model makes little distinction between the long run and short run because

Higher unemployment tends to be associated with

In the short run, if aggregate demand shifts to the left while the position of the short-run aggregate supply curve does NOT change, then

Consider the above figure. If the aggregate demand went from AD2 to AD3, our nation would have gone from

A recessionary gap occurs when

"In the classical model, the equilibrium level of real Gross Domestic Product (GDP) is completely supply-determined." Do you agree or disagree? Why?

The short-run aggregate supply curve is positively sloped because

In the classical model