Exam 12: The Determination of Aggregate Output, the Price Level, and the Interest Rate

If the combination r = 5% and Y = $100 billion is on the Fed rule line,we know that the combination r = 7% and Y = $100 billion would represent

The Federal Reserve's policy to "lean against the wind" means that

An increase in the price of a key input in production,like oil,increases aggregate supply.

Which of the following equations represents equilibrium in the goods market?

Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3 -Refer to Figure 12.3.Hurricane Katrina destroyed a large portion of the infrastructure along the Gulf of Mexico coast.This caused

Refer to the information provided in Figure 12.6 below to answer the questions that follow. Figure 12.6 -Refer to Figure 12.6.Suppose the equilibrium output is initially $600 billion.A decrease in wages and an increase in government spending will,for sure,increase

Other things equal,an increase in the price level ________ the equilibrium interest rate and ________ equilibrium output.

Refer to the information provided in Figure 12.8 below to answer the questions that follow. Figure 12.8 -Refer to Figure 12.8.If the economy is at point A currently producing Y0 and the Z factors increase,the economy will move to Point ________ in the short run and to Point ________ in the long run.

Whenever the aggregate supply curve intercepts the aggregate demand curve,the economy is producing full employment output.

A decrease in government spending shifts aggregate demand to the left.

________ shifts the Fed rule to the left.

Refer to the information provided in Figure 12.8 below to answer the questions that follow. Figure 12.8 -Refer to Figure 12.8.This economy cannot continue to produce Y1 (or at point B)because

When the interest rate is high,planned investment is ________ so output is ________.

To decrease output the government could

The rationale underlying policies to deregulate the economy is that these policies would

The aggregate demand curve shows that,ceteris paribus,

Refer to the information provided in Figure 12.4 below to answer the questions that follow. Figure 12.4 -Refer to Figure 12.4.Which of the following causes the economy to move from Point A to Point E?

If the United States were to pass legislation that would make it easier for people to emigrate to the United States,this would cause

If production costs increase,the price level will rise.

Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3 -Refer to Figure 12.3.A decrease in aggregate supply is represented by