Exam 12: The Determination of Aggregate Output, the Price Level, and the Interest Rate

Refer to the information provided in Figure 12.5 below to answer the questions that follow. Figure 12.5 -Refer to Figure 12.5.As a result of ________,the equilibrium interest rate increases and the equilibrium output level increases.

The Fed is leaning against the wind when it sets a high interest rate during a recession.

Refer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1 -Refer to Figure 12.1.This economy reaches capacity at

Refer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1 -Refer to Figure 12.1.At aggregate output levels above $1,500 billion,firms in this economy are most likely experiencing

Refer to the information provided in Figure 12.7 below to answer the questions that follow. Figure 12.7 -Refer to Figure 12.7.Which of the following statements characterizes an output level of $800 billion?

________ shifts the Fed rule to the left.

Potential output is the most that can be produced in an economy at a particular point in time.

Refer to the information provided in Figure 12.8 below to answer the questions that follow. Figure 12.8 -Refer to Figure 12.8.If the economy is currently at Point D producing output level Y₂,which of the following is NOT true?

Refer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1 -Refer to Figure 12.1.At aggregate output levels below $500 billion,this economy is most likely experiencing

An increase in the price level shifts the IS curve to the left.

When the aggregate supply curve is vertical,which of the following is NOT true?

A decrease in taxes on business investments will increase aggregate supply.

If there is a decrease in the percentage of employees whose wages adjust automatically with changes in the price level,the aggregate supply curve will become

________ shifts the IS curve to the left.

The aggregate demand curve slopes downward because at higher price level

Refer to the information provided in Figure 12.2 below to answer the questions that follow. Figure 12.2 -Refer to Figure 12.2.Between the output levels of $300 billion and $600 billion,the relationship between the price level and output is

Related to the Economics in Practice on p.554: In the simple "Keynesian" view,maximum output is NOT defined by the

The Federal Reserve's policy to "lean against the wind" means that

The level of aggregate output that can be sustained in the long run without inflation is known as

If government spending increases,then the IS curve shifts to the right.