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

An increase in the price level is likely to increase the aggregate amount of output supplied in the short run because

Refer to the information provided in Figure 12.6 below to answer the questions that follow. Figure 12.6 -Refer to Figure 12.6.Which of the following will,unambiguously,decrease the price level?

When the aggregate supply curve is vertical,which of the following is NOT true?

Other things equal,an increase in the Z factors shifts

The aggregate demand curve shows that at higher price levels the total quantity of output demanded is greater.

Refer to the information provided in Figure 12.4 below to answer the questions that follow. Figure 12.4 -Refer to Figure 12.4.Suppose the economy is at Point A,an increase in the price level moves the economy to Point

The long-run aggregate supply curve is vertical if

To decrease the price level the government could

A decrease in taxes on business investments will increase aggregate supply.

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

If the economy produces full employment output,an increase in government spending increases output but not the price level.

Related to the Economics in Practice on p.554: In the simple "Keynesian" view,maximum output is NOT defined by the

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 the Z factors ________ equilibrium output and ________ the price level.

The real wealth effect explains why the aggregate supply curve is horizontal in the long run.

The aggregate demand curve slopes downward because at higher price level

Which of the following sequence of events follows a rise in the discount rate?

The aggregate demand curve is the sum of all demand curves of all goods and services in the economy.

In an economy,when the price level falls,consumers and firms buy more goods and services.This relationship is represented by the

Other things equal,an increase in the Z factors ________ the equilibrium interest rate and ________ equilibrium output.

The level of aggregate output demanded falls when the price level rises,because the resulting increase in the interest rate will lead to