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

A leftward shift of the short-run aggregate supply curve means that society can get a larger aggregate output at any price level.

Assuming a long-run aggregate supply curve, an increase in government spending results in ________ in output and ________ in prices.

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

Refer to the information provided in Figure 11.3 below to answer the questions that follow. Figure 11.3 -Refer to Figure 11.3. During the 1980s, many firms in the United States were not investing in new capital. This would have caused

What is the total demand for goods and services in an entire economy called?

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

11.5 The Long-Run AS Curve Refer to the information provided in Figure 11.7 below to answer the questions that follow. Figure 11.7 -Refer to Figure 11.7. Which of the following statements characterizes an output level of $400 billion?

Which of the following would cause the short-run aggregate supply curve to shift to the left?

If the long-run aggregate supply curve is vertical, factors that shift the aggregate demand curve to the left will increase the price level.

Other things equal, a decrease in the Z factors ________ the equilibrium interest rate and ________ equilibrium output.

Related to the Economics in Practice on p. 227: In the simple "Keynesian" view, the aggregate supply curve

Refer to the information provided in Figure 11.4 below to answer the questions that follow. Figure 11.4 -Refer to Figure 11.4. Suppose the economy is at Point A, a decrease in the price level moves the economy to Point

To determine the price level and aggregate output, the aggregate demand and aggregate supply must

Related to the Economics in Practice on p. 227: In the simple "Keynesian" view, maximum output is not defined by the

Long-run aggregate supply is equal to

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

If the economy is operating way below capacity, an increase in aggregate demand causes a ________ change in the price level and ________ change in output.

Decreasing government spending and and an oil embargo will both have an effect towards increasing the price level.

Refer to the information provided in Figure 11.5 below to answer the questions that follow. Figure 11.5 -Refer to Figure 11.5. As a result of ________, the equilibrium interest rate increases and the equilibrium output level decreases.

The quantity of aggregate output demanded will fall if