Exam 11: Classical and Keynesian Macro Analyses

-In the above figure,if the relevant aggregate demand curve is AD2,what are the short-run equilibrium price level and real GDP?

Saving is a leakage from the circular flow.Why didn't the classical economists think saving might cause consumption expenditures to fall short of total output?

Suppose the U.S.dollar gains strength against the euro (and against other major currencies).This strengthening of the dollar will cause which of the following to occur?

The Keynesian short-run aggregate supply (SRAS)curve is

Higher unemployment tends to be associated with

The condition of fully flexible wages and prices was assumed by

John Maynard Keynes developed his economic theories in the

According to Keynes,the classical model could not explain

Which of the following statements is correct? I.If other factors are held constant,the level of employment in the economy determines real Gross Domestic Product (GDP). II.According to classical economists,only voluntary unemployment exists in the long run.

A recessionary gap occurs when

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?

Inflation that is caused by an increase in aggregate demand which is not matched by an increase in aggregate supply is called

In the classical model,the aggregate supply curve is

Keynesian economists argue that

Suppose the Federal Reserve increases the money supply.Which of the following will tend to occur as a result of this policy in a Keynesian model?

According to the classical model,investment

Economic growth will NOT result in deflation if aggregate demand shifts

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

According to the classical model,an increase in aggregate demand would

In the classical model,the interest rate will adjust to equate