Exam 8: Aggregate Demand and Aggregate Supply

Exhibit 8-1 -Refer to Exhibit 8-1.Assume the economy is originally in equilibrium at point A.If unusually bad weather leads to decreased production of wheat,corn,and other crops,at which point is the economy most likely to end up in the short run?

Assume that the economy is currently in short-run equilibrium,then the U.S.dollar appreciates.Describe the correct sequence of events that happens as the economy adjusts to a new short-run equilibrium.

A business firm's profitability is based in part on the

After an adverse supply shock occurs,the ____________ curve shifts _____________ resulting in a(n)_________________ in the U.S.price level and a(n)________________ in Real GDP.

If foreign real national income rises,the U.S.____________ curve shifts _____________.When labor productivity increases the _____________ curve shifts _______________.If both of these situations occur simultaneously,the combined result would be a(n)______________ the price level and a(n)__________________ Real GDP in the United States.

There is a rise in labor productivity in the economy.As a result,in the short run Real GDP __________ and the price level __________.

Suppose the real exchange rate of 115 Japanese yen to the dollar moves to 105 yen to the dollar.The dollar has __________,making Japanese goods __________ expensive for Americans.

Greater wealth makes people _____________ willing to spend,causing __________ the economy's AD curve.

Some of the factors that can shift the short-run aggregate supply curve can also cause a shift in the long-run aggregate supply curve.

Exhibit 8-3 -Refer to Exhibit 8-3.A movement from point A to point B on AD₁ would have been the result of

The real balance effect is the change in

Wage rates fall.This increases __________ and the __________ curve shifts rightward.

As the U.S.dollar appreciates and the Japanese yen depreciates,

One of the reasons why the AD curve slopes downward is that as the

Exhibit 8-3 -Refer to Exhibit 8-3.A shift in aggregate demand from AD₂ to AD₁ would have been the result of

The short-run aggregate supply (SRAS)curve shows the quantity

An increase in the price of nonlabor inputs

Starting from short-run equilibrium,the following occurs: personal income taxes rise and foreign real national income rises.What is the effect on the price level and Real GDP in the short run?

Exhibit 8-2 -Refer to Exhibit 8-2.Based on the given change,what word (rises or falls)should go in blank (5)and blank (6),respectively,to summarize the resulting impact on short run equilibrium?

Which of the following statements is false?