Exam 19: Aggregate Supply and Aggregate Demand

If there is an increase in expected future income,then

The 2008-2009 recession must have been a result of ________ because otherwise the combination of the ________ cannot be explained.

According to the AS-AD model,

If demand pull inflation occurs when the economy is already at potential GDP,then following the initial increase in aggregate demand,the

Over a business cycle,the quantities of capital,human capital,and entrepreneurial talent

Give examples of factors that decrease aggregate supply.Which way does the AS curve shift?

The quantity of real GDP supplied ________ when the price level increases because ________.

When the U.S.price level rises relative to other nations' price levels,then

"The aggregate demand multiplier results in the aggregate demand curve shifting by more than any given initial change in expenditure." Is the previous statement correct or incorrect?

A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________.

When the aggregate supply curve intersects the aggregate demand curve at a level of real GDP that exceeds potential GDP,is there an inflationary gap or a deflationary gap? What adjustments will take place?

An increase in ________ increases potential GDP and ________ aggregate supply.

Explain the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve.

Suppose that the money prices of raw materials increase so that short-run aggregate supply decreases.If the Federal Reserve does not respond,the higher money price of raw materials will I.repeatedly shift the aggregate demand curve rightward and raise the price level. Ii.shift the aggregate demand curve rightward and the aggregate supply curve leftward,raising prices. Iii.result initially in lower employment and a higher price level.

-The table above gives data for the nation of Pearl,a small island in the South Pacific.If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level,the new equilibrium real GDP is

Which of the following is true?

-In the figure above,the shift in the aggregate demand curve from AD1 to AD3 could be the result of an increase in

Unemployment increases when

-What is the current equilibrium price level and real GDP for the economy illustrated in the figure above? Does this economy have an inflationary gap,a recessionary gap,or neither? As it adjusts toward full employment,which curve shifts? What is the equilibrium real GDP and price level that the economy will ultimately reach?

If the equilibrium price level is 135 but the actual price level is 120,then