Exam 11: Classical and Keynesian Macro Analyses

What is Say's law and what does it mean?

According to Say's law

Suppose that the current price level is 110, real GDP is $100 billion, and long-run aggregate supply is $95 billion. We can conclude that

Say's law implies that

If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that

The condition of fully flexible wages and prices was assumed by

The classical economists assumed that

In the classical model, real Gross Domestic Product (GDP) per year is

Joe's increase in wages has been identical to the increase in the price level. Joe thinks that he is better off and has increased his expenditures. Joe's behavior is consistent with

If the U.S. government were to relax its restrictions on offshore oil well drilling in Alaska, the result to aggregate supply would be to

According to the classical model, more saving leads to more investment because

According to classical theory, any changes in aggregate demand will

With respect to unemployment, the classical model states that

Using a graph, show the effects of a weaker dollar on the economy. Explain.

Real GDP is ________ determined in the classical model and ________ determined in the Keynesian model.

Whom among the following was a classical economist?

-In the above figure, what are the long-run equilibrium price level and real GDP?

The short-run aggregate supply curve would shift and the long-run aggregate supply curve would remain fixed if

The Keynesian short-run aggregate supply curve is demonstrated graphically as a

A temporary embargo on oil from Saudi Arabia going in to the United States would