Exam 11: Classical and Keynesian Macro Analyses

An assumption of the classical model is that

The original Keynesian economic theory states that

An unexpected event that causes the aggregate demand curve to shift inward or outward is an

Saving represents

The exchange rate last month was $1= 3.2 Swiss francs.This month it is $1 = 3.12 Swiss francs.We can say that the value of the dollar

All items below will decrease short-run aggregate supply EXCEPT

In the classical model,changes in interest rates will always ensure that

Oil prices increased significantly in 2008.According to the Keynesian model,this increase in oil prices should have caused which of the following to occur?

Involuntary unemployment

Economic growth due to labor force expansion or capital investments will result in I.A leftward shift of short-run aggregate supply. II.A rightward shift in long-run aggregate supply.

Whom among the following was a classical economist?

In the classical model,how do shifts in aggregate demand affect real GDP?

A key assumption in the classical model is

Full employment in the classical model is maintained by

-In the above figure,an increase in aggregate demand has resulted in

Consequences of Changes in Aggregate Demand -Refer to the above figure.An increase in aggregate demand beyond real Gross Domestic Product (GDP)level Y1 would result in

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

Holding the level of prices fixed implies that a given increase in aggregate demand

The approach to understanding the determination of real GDP and the price level that emphasizes flexible wages and prices and competitive markets is

Natural disasters like severe earthquakes are devastating to the economy as well as to the individuals harmed due to