Exam 12: Aggregate Demand and Aggregate Supply

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

When the U.S. price level increases, economists predict a:

If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:

If you were told the MPC was = 0.75 and the government engaged in a tax decrease of $400B, then the overall change in GDP would be:

The aggregate supply and aggregate demand model is used to explain the:

The aggregate demand curve slopes downward in part due to the:

Short-run decisions refer to the:

In macroeconomics, the long run refers to:

Which of the following is a component of aggregate demand?

In the short run, the aggregate supply curve:

When the price level increases people:

If the economy is in a recession, in an effort to move the economy to the long-run equilibrium, the government could:

The long-run aggregate supply curve will shift to the right if the:

One reason that explains why the short-run aggregate supply curve is upward sloping is:

Economic stagnation coupled with high inflation is commonly called:

Sticky wages occur because:

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

Increases in the overall price level:

A decrease in the level of capital inside a nation would cause the:

A year-long drought that destroys most wheat crops for the season would shift the: