Exam 20: Aggregate Demand and Aggregate Supply

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Refer to Political Instability Abroad. What would the change in the interest rate created by foreigners wanting to buy more U.S. assets do to investment spending in the U.S.?

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Which of the following affected aggregate demand during the recession of 2008-2009?

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The long-run aggregate supply curve would shift right if the government were to

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Which of the following would cause stagflation?

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Microeconomic substitution is impossible for the economy as a whole because

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According to classical macroeconomic theory, changes in the money supply affect

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Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?

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The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

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Suppose that during the Great Depression long-run aggregate supply shifted left. To be consistent with what happened to the price level and output, what would have had to happen to aggregate demand?

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In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases,

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A decrease in the expected price level shifts

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When the dollar appreciates, U.S.

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The effect of a change in the value of the dollar in the foreign exchange market due to a change in the price level helps explain the slope of aggregate demand, but does not shift it. The effects of a change in the value of the dollar in the foreign exchange market due to speculation is shown by shifting the aggregate demand curve.

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During World War II government expenditures increased almost five-fold and output almost doubled.

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Figure 33-7. Figure 33-7.   -Refer to Stock Market Boom 2015. Which curve shifts and in which direction? -Refer to Stock Market Boom 2015. Which curve shifts and in which direction?

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Recession come at

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Other things the same, as the price level falls,

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Figure 33-2. Figure 33-2.   -Refer to Figure 33-2. Line X is -Refer to Figure 33-2. Line X is

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Suppose the government raises taxes. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

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Which of the following effects helps to explain the slope of the aggregate-demand curve?

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