Exam 19: Aggregate Supply and Aggregate Demand

An economy is at a full-employment equilibrium,and then the aggregate demand curve shifts leftward.As a result,the price level ________ and real GDP ________.

How does an increase in the price level affect the aggregate quantity of goods and services demanded?

Describe how a demand-pull inflation can occur.

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

When OPEC nearly tripled the price of oil in late 1973,

A year over year ________ in the buying power of money means that definitely ________ from one year to the next.

As a result of OPEC ________ oil prices in 1973 and 1980,real GDP in United States ________.

"Moving along the AS curve,the real wage rate is constant while moving along the potential GDP line,the real wage rate changes." Explain whether the previous statement is correct or incorrect.

________ increases the quantity of real GDP supplied and is shown as a movement along the AS curve.

If the equilibrium price level is 135 but the actual price level is 150,then

Aggregate demand ________ and shifts the AD curve ________ when ________.

If the quantity of real GDP supplied equals the quantity of real GDP demanded,then

At a trough in the business cycle,the macroeconomic equilibrium is ________ the level of potential real GDP.

A decrease in investment leads to ________ in aggregate demand and ________ in real GDP.

If real GDP is less than potential GDP,then the money wage rate ________,and aggregate supply ________ so that the price level ________.

The real wage rate definitely falls if the money wage rate ________ and the price level ________.

During a demand-pull inflation,if the Fed tries to maintain a level of real GDP above potential GDP,the AD curve will ________ and the AS curve will ________.

Macroeconomic equilibrium occurs when

The aggregate supply curve shifts

The ________,the ________ is the quantity of real GDP supplied and the ________ is the quantity of real GDP demanded.