Exam 11: Macroeconomic Equilibrium: Aggregate Demand and Supply

The fact that the aggregate demand curve slopes downward means that aggregate expenditures increase when the price level decreases.

Identify the correct statement about the aggregate supply curve.

The table given below reports the average hourly wage received by laborers and the price index for two years. Table 8.2 Refer to Table 8.2.The data in the table suggests that in year 2:

Other things held constant, when the general price level changes:

Each of the panels given below represents the short-run equilibrium in the U.S.economy.The Aggregate Demand and Aggregate Supply curves in each panel responds to various economic changes. Figure 8.1 Refer to Figure 8.1.Which of the graphs in the figure best describes the impact of an effective oil embargo that raises the price of gasoline?

The AD curve will shift to the right if:

The steeper slope of the aggregate supply curve in the long run indicates that an increase in aggregate demand will cause an increase in the price level and an even greater increase in output in the long run.

Which of the following is an impact of an increase in the general price level?

Given that energy is an input in production, the development of a cheaper source of energy will result in:

A higher domestic price level lowers aggregate expenditures and, therefore, shifts the aggregate demand curve to the left.

Suppose an increase in investment spending results in an increase in equilibrium real GDP and a rise in the equilibrium price level.This implies that the aggregate supply curve for this economy is vertical.

In the long-run, the aggregate supply curve normally is downward-sloping.

Long-run aggregate supply increases as:

Government spending is set by the federal authorities in such a way that aggregate supply just equals aggregate spending.

The steepness of the aggregate supply curve depends on the:

The change in aggregate expenditures resulting from a movement in the domestic price level, which in turn changes the price of domestic goods in relation to foreign goods, is known as the:

The main reason why the short-run aggregate supply curve slopes upward is that as the average price level increases, larger scales of production become more profitable.

Which of the following is true of the aggregate demand curve?

Pessimistic consumer expectations and decreased government spending are both associated with:

Which of the following statements is true about the economy in the long run?