A) increase aggregate demand. B) increase the quantity of real GDP demanded. C) decrease aggregate demand. D) decrease the quantity of real GDP demanded. A) increase aggregate demand. B) increase the quantity of real GDP demanded. C) decrease aggregate demand. D) decrease the quantity of real GDP demanded.

Exam 24: Aggregate Demand and Aggregate Supply Analysis

Explore all topics

Explain how each of the following events would affect the aggregate demand curve. a.Lower interest rates b.A decrease in net exports c.A decrease in the price level d.Slower income growth in other countries e.A decrease in imports

Free

(Essay)

4.8/5

(43)

Question 1

Correct Answer:

Verified

a.Lower interest rates would increase investment spending and consumer spending,particularly on durable goods,which would cause the aggregate demand curve to shift to the right.
b.A decrease in net exports would cause the aggregate demand curve to shift to the left.
c.A decrease in the price level would cause a movement down along the aggregate demand curve.
d.Slower income growth in other countries would decrease U.S.exports,which would cause the aggregate demand curve to shift to the left.
e.A decrease in imports would cause net exports to be greater,causing the aggregate demand curve to shift to the right.

Why does the short-run aggregate supply curve slope upward?

Free

(Essay)

4.7/5

(31)

Question 2

Correct Answer:

Verified

The short-run aggregate supply curve slopes upward because as the prices of final goods and services rise,the prices of inputs rise more slowly.The higher price level increases profits and the willingness of firms to supply more goods and services.A secondary reason the SRAS slopes upward is that,as the price level rises,some firms are slow to adjust their prices.A firm that raises its prices slowly when the price level increases may find that its sales increase and therefore will increase production.

A decrease in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?

Free

(Multiple Choice)

4.8/5

(35)

Question 3

Correct Answer:

Verified

Spending on the war in Afghanistan is essentially categorized as government purchases.How do increases in spending on the war in Afghanistan affect the aggregate demand curve?

(Multiple Choice)

4.9/5

(48)

Question 4

What variables cause the short-run aggregate supply curve to shift? For each variable,identify whether an increase in that variable will cause the short-run aggregate supply curve to shift to the right or to the left.

(Essay)

4.8/5

(41)

Question 5

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in productivity would be represented by a movement from

(Multiple Choice)

4.9/5

(38)

Question 16

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in the value of the domestic currency relative to foreign currencies would be represented by a movement from

(Multiple Choice)

4.9/5

(38)

Question 17

Which of the following would not be considered a positive addition to household wealth?

(Multiple Choice)

4.9/5

(44)

Question 18

Which aggregate supply curve has a positive slope?

(Multiple Choice)

4.7/5

(39)

Question 19

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.

(Multiple Choice)

4.8/5

(45)

Question 20

Showing 1 - 20 of 286

Exam 24: Aggregate Demand and Aggregate Supply Analysis

Explain how each of the following events would affect the aggregate demand curve. a.Lower interest rates b.A decrease in net exports c.A decrease in the price level d.Slower income growth in other countries e.A decrease in imports

Why does the short-run aggregate supply curve slope upward?

A decrease in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?

Spending on the war in Afghanistan is essentially categorized as government purchases.How do increases in spending on the war in Afghanistan affect the aggregate demand curve?

What variables cause the short-run aggregate supply curve to shift? For each variable,identify whether an increase in that variable will cause the short-run aggregate supply curve to shift to the right or to the left.

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in productivity would be represented by a movement from

Explain why the long-run aggregate supply curve is vertical.

For the recession of 2007-2009,it took ________ for employment to return to its cyclical peak.

A supply shock causes the long-run aggregate supply curve to shift left,decreasing the price level.

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

The recession of 2007-2009 made many consumers pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Suppose the U.S.GDP growth rate is slower relative to other countries' GDP growth rates.This will

The business cycle ________ on Delta Airlines since the company's inception over 80 years ago.

Inflation will

Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve.

The invention of the cotton gin ushered in the Industrial Revolution and began a long period of technological innovation.What did this technological change do the short-run supply curve?

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in the value of the domestic currency relative to foreign currencies would be represented by a movement from

Which of the following would not be considered a positive addition to household wealth?

Which aggregate supply curve has a positive slope?

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Long-run macroeconomic equilibrium occurs when aggregate demand short-run aggregate supply and they the long-run supply curve.

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.