Exam 10: Real GDP and the Price Level in the Long Run

The values on the axes of the long-run aggregate supply diagram are

An increase in the money supply will cause which of the following to occur?

The shape of the aggregate demand curve does NOT tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need

If your income stays the same and the price level increases, you will buy fewer goods and services due to the

The interest rate effect shows that if the price level increases

What pattern would you observe in an economy in which aggregate demand is increasing but in which long-run aggregate supply remained the same?

The real-balance effect indicates that at higher price levels

Economic growth is represented on the aggregate supply model by a

The open economy effect and interest rate effect are two of the reasons why

Economic growth causes the

When total planned real expenditures change due to the changes in net exports, this is known as the

The downward slope of the aggregate demand curve shows that

Holding nominal money balances constant, a decrease in the price level

The long run aggregate supply curve is vertical because

Aggregate supply is

The interest rate effect suggests that

If the dollar appreciates and foreign goods become less expensive, the total planned expenditures on domestic goods and services will

When interest rates rise

Secular inflation in the United States since 1960 has been most likely be the result of

Economic growth will be associated with a constant price level when