Exam 11: Classical and Keynesian Macro Analyses

Refer to the above figure. Which point or points represent(s) a short-run equilibrium?

In the classical model,

According to the classical theory, the aggregate supply curve is

According to Keynes, the "stickiness" of wage rates could best be explained by

A temporary increase in the price of oil would

In an economic downturn, sticky wages and prices reduce the economy's speed of adjustment because

Individuals will increase their saving as

Refer to the above figure. Suppose the current aggregate demand is represented by AD2. If aggregate demand falls to line AD3, then

A short-lived increase in oil prices caused by destruction of oil-producing and oil-refining facilities by a large hurricane will

Which of the following is NOT a reason why real GDP can be expanded beyond a level consistent with its long-run growth path in modern Keynesian analysis?

Say's law explains

In the classical model, a rightward shift in the aggregate demand curve will, in the long run,

According to classical economists, the credit market reaches an equilibrium when

If equilibrium level of real Gross Domestic Product (GDP) is greater than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is

There is a distinction between the long-run aggregate supply (LRAS) curve and the short-run aggregate supply (SRAS) curve. In the long run

The equilibrating force in the credit market in the classical model is

A change in tastes for U.S. produced goods will

According to the classical model, desired saving is

-The three curves in the above figure are

In the above figure, the economy would most likely move from AD1 to AD2 because of