Exam 12: Aggregate Demand and Aggregate Supply

If the government were to increase income taxes, we would predict:

When prices rise, the interest rate:

A decrease in the price level will cause:

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

Which of the following is a component of aggregate demand?

We define net exports to be:

An economy in which output has decreased and prices have increased would suggest that there has been a:

One way the government can boost the economy out of a recession is:

Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:

An aggregate supply curve that is a vertical line must be:

When the price level increases people:

When a nonprice change affects any of the four components of GDP the:

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

If the government does not react to a recession:

If consumption increases in general the aggregate demand curve will:

The wealth effect explains the:

A rise in the overall price level means that:

If the government were to decrease corporate income tax, we would predict a:

If the economy is in a recession, it means that:

When the economy is creating less output than its potential, it means: