Exam 12: Aggregate Demand and Aggregate Supply

Lower interest rates motivate:

If a positive permanent supply shock were to occur, the resulting equilibrium would be a:

Fluctuations around the long-run aggregate supply curve are:

Something that would cause the long-run aggregate supply curve to shift to the right would be:

Falling output, in the short run, could be due to:

If the aggregate demand curve shifts to the left in the short run then the long-run equilibrium will be at a:

The long-run aggregate supply curve:

The introduction of the power loom during the Industrial Revolution caused:

Some call the Great Recession the:

When comparing tax and spending policy by the government, in general we note that the tax policy multiplier effect relative to the spending multiplier should be:

When the government considers whether it should change its spending in response to a recession, it must weigh the tradeoff between ____________ and ________________.

When the long-run aggregate supply curve shifts right, it represents:

The aggregate demand curve:

In the macroeconomic model of aggregate supply and aggregate demand:

Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:

When the economy is operating at a point where aggregate demand equals long-run aggregate supply, it must be true that:

The quantity measure in the aggregate demand relationship is the:

If government spending were to increase we expect that the aggregate demand curve will:

The long-run aggregate supply curve represents the level of output possible if the economy:

Assuming an economy starts in long-run equilibrium, if the aggregate demand curve were to decrease: