Exam 11: The Determination of Aggregate Output, the Price Level, and the Interest Rate

Refer to the information provided in Figure 11.2 below to answer the questions that follow. Figure 11.2 -Refer to Figure 11.2. Between the output levels of $600 billion and $900 billion, the relationship between the price level and output is

Related to the Economics in Practice on p. 223: Which measure of the aggregate price level does the Fed consider the most important?

If ________ equilibrium output ________, the price level decreases.

If wages do not fully adjust to changes in prices, the aggregate supply curve is vertical.

When the ________ decreases, then potential output decreases.

The Fed rule shows combinations of income and interest rates consistent with equilibrium in the goods market.

A low interest rate discourages planned investment.

11.3 The Final Equilibrium Refer to the information provided in Figure 11.6 below to answer the questions that follow. Figure 11.6 -Refer to Figure 11.6. Suppose the equilibrium price level is 110. An increase in the Z factors ________ equilibrium output and ________ the price level.

Refer to the information provided in Figure 11.8 below to answer the questions that follow. Figure 11.8 -Refer to Figure 11.8. If the economy is currently at Point D producing output level Y₂, which of the following is not true?

If the price level falls, the aggregate supply increases as a result of the aggregate demand curve shifting left.

Refer to the information provided in Figure 11.1 below to answer the questions that follow. Figure 11.1 -Refer to Figure 11.1. At aggregate output levels above $1,500 billion, firms in this economy are most likely experiencing

The quantity of output supplied at ________ is represented by the aggregate supply curve.

If the combination r = 10% and Y = $200 billion is on the IS curve, we know that the combination r = 10% and Y = $300 billion would represent

________ shifts the Fed rule to the right.

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

Related to the Economics in Practice on p. 223: Which of the following categories of personal consumption expenditures are mostly left out of the Core PCE measure of the aggregate price level?

Refer to the information provided in Figure 11.1 below to answer the questions that follow. Figure 11.1 -Refer to Figure 11.1. At aggregate output levels below $500 billion, this economy is most likely experiencing

11.3 The Final Equilibrium Refer to the information provided in Figure 11.6 below to answer the questions that follow. Figure 11.6 -Refer to Figure 11.6. Suppose the equilibrium price level is 110. An increase in wages and an increase in government spending will, for sure, increase

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

Refer to the information provided in Figure 11.1 below to answer the questions that follow. Figure 11.1 -Refer to Figure 11.1. Between the output levels of $500 billion and $1,000 billion, the relationship between the price level and output is