Notesale: Turn your study into money

Title: CH10. Graded A
Description: CH10 1) The aggregate supply curve The total of all planned production for the entire economy is known as The long run aggregate supply curve (LRAS) also represents Long-run aggregate supply reflects The long-run aggregate supply curve is The long-run aggregate supply curve The long-run aggregate supply curve is vertical because The long-run aggregate supply curve What is measured on the vertical axis of the aggregate demand/aggregate supply model? Which of the following statements is TRUE? Long-run aggregate supply is The long-run aggregate supply curve is The long-run aggregate supply curve of an economy corresponds to If a nationʹs production possibilities curve shifts outward, we should expect its long-run aggregate supply curve to The full-employment and full-adjustment level of real Gross Domestic Product (GDP) in the economy is represented by A human resource such as ingenuity can be thought of as Which of the following will cause the long-run aggregate supply curve to shift? II. Changes in government spending. III. Changesinthemoneysupply. As the capital stock grows and technology improves, we would expect the long-run aggregate supply curve to The long-run aggregate supply will increase when A countryʹs long-run aggregate supply curve will shift to the left when there is (are) Over time in a growing economy, the long run aggregate supply curve will Aggregate supply is Economic growth can be depicted as An assumption on the LRAS curve is The total of all planned production for the economy is When talking about aggregate supply, it is necessary to C) distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. The real output of the economy under conditions of full employment . The full-employment level of GDP is The position of the long-run aggregate supply curve is determined by B) The long-run aggregate supply when resources are fully employed The long-run aggregate supply curve is The long run aggregate supply curve is vertical because The long-run aggregate supply curve occurs at the level of real GDP consistent with Which of the following does NOT affect the long-run aggregate supply curve? An increase in the level of prices of goods and services will do what to the long-run aggregate supply curve? The long-run aggregate supply curve is determined by all of the following EXCEPT The long-run aggregate supply curve can be thought of as the A) full-employment level of real GDP. The long-run aggregate supply curve will shift to the left when The long-run aggregate supply curve will shift outward to the right when The natural rate of unemployment will help determine Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve? Which of the following would cause the long-run aggregate supply curve to shift to the right? B) If our economy is growing at a constant rate of 5 percent per year, then over a period of 10 years we would expect to see which of the following? Economic growth can be thought of as Real GDP will increase over the long run if The aggregate supply curve cannot tell us The aggregate supply curve shows A) the total of all planned production for an economy. Aggregate supply D) is the total of all planned production in an economy. We draw the long-run aggregate supply curve as a vertical line to reflect the fact that B) changes in the price level do not alter the level of long-run real GDP after full adjustment has occurred. The level of real GDP identified by the long-run aggregate supply curve is A) the full-employment level of real GDP. What is measured on the vertical axis when we draw a graph of long -run aggregate supply? C) the price level The values on the axes of the long-run aggregate supply diagram are A) real GDP per year and the price level. When the production possibilities curve shifts outward, D) the long-run aggregate supply curve shifts to the right. What is measured on the horizontal axis when we draw a graph of the long -run aggregate supply curve? D) real GDP What causes the long-run aggregate supply curve to shift right? A) economic growth The long-run aggregate supply curve shifts right at the same time as B) the production possibilities curve shifts outward. A rightward shift of the long-run aggregate supply curve is caused by The long-run aggregate supply curve assumes that B) all factors of production are fully employed. The long-run aggregate supply curve is Long-run aggregate supply curve corresponds to B) real GDP when all resource costs have adjusted fully to a change in the price level. The slope of the long-run aggregate supply curve is D) undefined. Why is the long-run aggregate supply curve a vertical line? Long-run aggregate supply is C) the real production of goods and services after full adjustments have been made. Long-run aggregate supply and a countryʹs production possibility curve (PPC) A) are closely related. A long-run aggregate supply curve may graphically be represented as a A) vertical line. Economic growth is represented on the aggregate supply model by a B) shift in the long-run aggregate supply curve to the right. Economic growth can be shown by C) a rightward shift in the aggregate supply curve. Economic growth is demonstrated by the LRAS as it Economic growth causes the Which of these questions does aggregate demand help us answer? I. What determines the total amount of our output that individuals, firms, governments and foreigners want to buy? II. What is the economyʹs long-run real Gross Domestic Product (GDP)? III. Whatdeterminestheeconomyʹsequilibriumpricelevelandtherateofinflation? D) I and III The total level of all planned expenditures in the economy best describes B) aggregate demand. C) aggregate expenditures. All of the following explain the downward slope of the aggregate demand curve EXCEPT Other things being equal, the economyʹs aggregate demand curve shows that C) a change in the general price level causes a change in the quantity of final goods and services purchased. Aggregate demand reflects A) planned total spending in the economy. What is measured on the horizontal axis of the aggregate demand/aggregate supply model? The sum of all planned expenditures for the entire economy at each possible price level is B) aggregate demand The aggregate demand curve plots C) planned expenditures against the price level. The aggregate demand curve is usually The horizontal axis for an aggregate demand curve measures Which of the following is NOT a reason for the slope of the aggregate demand curve? At each price level, the aggregate demand curve indicates A) the total amount of real planned expenditures. The aggregate demand curve shows that, if other factors are held constant, According to the interest rate effect, an increase in the price level, if other factors are held constant, will lead to A) a reduction in total real spending on interest-rate-sensitive goods. The real-balance effect implies that when C) the price level increases, the value of money balances held by individuals, firms, government, and foreigners decreases and spending decreases. When prices increase, the real interest rate B) will increase and total planned spending on goods and services will decrease. The interest rate effect operates through A) credit markets by changing borrowing costs. When a change in the price level causes a change in the purchasing power of currency, which then changes planned real expenditures at all income levels, it is called One reason that the aggregate demand curve slopes downward is because A rise in the price level has a direct effect on spending because The real-balance effect shows that Another term for the real-balance effect is B) the wealth effect. If other factors are held constant, an increase in the price level The interest rate effect that helps explain the slope of the aggregate demand curve arises because Higher interest rates tend to A) reduce the total planned spending on goods and services. When interest rates rise, When the relative prices of U.S.-manufactured goods go up, the result is A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as If the price level increases, A) the buying power of your checking account falls. One impact of a rise in the dollarʹs value is that A) imports become cheaper for the U.S. consumer. An individual holds $10,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect A) the individualʹs real wealth to decrease and consumption to decline. A higher domestic price level should According to the interest rate effect, a decrease in the price level will When the U.S. price level falls, the open economy effect indicates that The aggregate demand curve differs from an individual demand curve in that B) the aggregate demand curve looks at the entire circular flow of income and product, while an individual demand curve looks at one good, holding everything else constant. How does aggregate demand curve (AD) differ from an individual demand curve (D)? Aggregate demand is B) the sum of all planned expenditures for the economy. The open economy effect suggests that The interest rate effect suggests that B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. The aggregate demand curve has Which of the following explains why the aggregate demand curve is downward sloping? Suppose that along the aggregate demand curve, real GDP equals $14.2 trillion when the GDP deflator is 90. If the GDP deflator were 95, real GDP along the aggregate demand curve would equal Other things being equal, along an aggregate demand curve, a higher price level is associated with Other things being equal, the lower are planned real expenditures along an aggregate demand curve, the When the price level increases, total planned real expenditures on goods and services falls. All of the following are responsible EXCEPT Which of the following is a factor that determines the shape of the aggregate demand curve? The change in total planned real expenditures resulting from a change in the real value of money balances when the price level changes, all other things held constant, is A) the real-balance effect. The real-balance effect refers to If you have $5000 and the GDP deflator decreases from 100 to 80 B) the $5000 will buy 20 percent more of the goods and services produced by society. The wealth effect is another term for the C) the real-balance effect. Holding nominal money balances constant, a decrease in the price level An indirect effect of an increase in the price level works through D) interest rates as people borrow to maintain their money balances, bidding up interest rates and reducing total planned real expenditures. The interest rate effect is part of the reason D) the aggregate demand curve is downward sloping. Which of the following statements is true about the interest rate effect? Higher interest rates A) reduce total planned real expenditures because they increase the cost of borrowing funds. If the price level increases, then The open economy effect refers to the fact that C) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S. goods by U.S. residents and foreign residents as a result of a higher price level. A shift away from expenditures on domestic goods and a shift toward expenditures on foreign goods when the domestic price level increases is known as Suppose a country has no trade with other countries and people can borrow as many funds as they want at the current interest rate. An increase in the price level will generate The aggregate demand curve Which of the following is NOT true about the aggregate demand curve? Which of the following is true about how the aggregate demand curve differs from the individualʹs demand curve? What determines the total value of aggregate demand for U.S. real GDP? Which one of the following is NOT a component of aggregate demand? The total of all planned real expenditures in the economy is called The aggregate demand curve shows Which of the following is NOT an explanation for the shape of the aggregate demand curve? The downward slope of the aggregate demand curve shows that What is one implication of the real-balance effect? The open economy effect and interest rate effect are two of the reasons why The aggregate demand curve shows the The aggregate demand curve is The aggregate demand curve is The real-balance effect indicates that at higher price levels Which of the following will occur when an economyʹs price level increases? The interest rate effect shows that if the price level increases, A decrease in U.S. prices relative to European prices An increase in U.S. prices relative to Japanese prices will When the price level declines, When the price level falls, The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called Which of the following cause the aggregate demand curve to slope downward and to the right? When a higher price level generates an increase in the interest rate that induces consumers to borrow less and buy less, this chain of events is referred to as Total planned real expenditures measured along the aggregate demand curve are made up of What is measured on the vertical axis of the aggregate demand graph? What is measured on the horizontal axis on the aggregate demand graph? When expenditures change due to changes in the real value of money caused by variations in the price level, this is known as the When total planned real expenditures change due to changes in the cost of borrowing that result from variations in the price level, this is known as the When total planned real expenditures change due to the changes in net exports, this is known as the If your income stays the same and the price level increases, you will buy fewer goods and services due to the If the dollar appreciates and foreign goods become less expensive, the total planned expenditures on domestic goods and services will Which of the following would cause aggregate demand to decrease? An aggregate demand curve Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right. Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. aggregate demand? An aggregate demand curve An increase in total planned real expenditures that is caused by a factor other than the price level will lead to the An increase in the money supply will cause which of the following to occur? The aggregate demand curve would shift to the right as a result of Which of the following will cause a leftward shift in the aggregate demand curve? Which one of the following would NOT increase aggregate demand? All of the following would cause the aggregate demand curve to shift EXCEPT Which of the following will NOT shift the aggregate demand curve? The aggregate demand curve will shift to the left if Which of the following will NOT shift the aggregate demand curve? An increase in the amount of money in circulation would cause a An increase in the U.S. price level causes a Which of the following would likely result in a shift of the aggregate demand curve to the right? An increase in aggregate demand is shown by Which of the following would likely result in a decrease in aggregate demand? Other things being equal, appreciation of the dollar Other things being equal, a depreciation of the dollar When investors buy more capital goods because the interest rates have fallen, the aggregate demand curve Which of the following would cause an increase in aggregate demand (AD)? Which of the following statements is correct? 1. I. A drop in the foreign exchange value of the dollar would decrease aggregate demand 2. II. A decrease in the amount of money in circulation would increase aggregate demand The shape of the aggregate demand curve does not tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need To find an economyʹs long-run equilibrium price level, locate the point where and cross and look to the left. Suppose total planned expenditures equal $14.4 trillion when the value of the price level is 95. If the price level dropped to 90, total planned real expenditures will equal If you have $1,000 and the Gross Domestic Product (GDP) deflator increases from 100 to 120, then A persistently declining price level resulting from economic growth and unchanged aggregate demand is called How is economic growth graphically depicted? Which of the following will result in secular deflation? Secular deflation occurs when An increase in the amount of physical capital will cause The U. S. has experienced inflation every year since 1959 due to Supply-side inflation is caused by If the economy grows steadily over several years and at the same time maintains the aggregate demand curve in its present position, then the economy will experience which of the following? Suppose the Federal Reserve implements expansionary monetary policy where the money supply increases. Which of the following will tend to occur in the long run as a result of this monetary policy action? When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve, Economic growth will be associated with a constant price level when Over the last twenty years, real GDP in the U.S. economy has increased and there has been inflation. This indicates that Economic growth takes place The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that In the long run, an increase in government spending, other things equal, generates The intersection of aggregate demand and long-run aggregate supply identify the price level at which total planned What would happen in an economy if total planned production exceeded total planned real expenditures? If the current price level is lower than the equilibrium price level, then it must be true that total planned If consumersʹ confidence in the economy rises, A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as If aggregate demand is stable and there is economic growth, the economy will experience A rightward shift of long-run aggregate supply without any change in aggregate demand An economy experiences real growth over time with stable aggregate demand. This would likely result in Which of the following is consistent with secular deflation? If persistent inflation was due to declines in long-run aggregate supply, what pattern would be observed? In an economy in which aggregate demand is stable and a period of sustained and significant productivity growth occurs, there will be What could cause a decrease in the price level and simultaneously an increase in GDP similar to the 1920s in the United States? Long-run equilibrium will occur at the price level at which Over the past several decades, what has been true about price levels in the United States? Supply-side inflation could be caused by which of the following? If there are steady decreases in aggregate supply, the economy will experience D) supply-side inflation. What has caused persistent inflation in the United States? A) The nationʹs long-run aggregate supply curve has shifted to the left. B) Supply-side inflation C) A decrease in labor productivity *[D) None of the above] Whenever the general level of prices rises because of continual increases in aggregate demand, we say that the economy is experiencing Demand-side inflation occurs when In looking back over the past 40 years, which of the following has the U.S. economy experienced? Which of the following factors could cause the economy to experience supply-side inflation? Supply side inflation can be caused by Which of the following is the main cause of the persistent inflation that we have experienced in the United A reduction the amount of oil (a resource) will tend to cause which of the following? If there is persistent inflation, Secular deflation Which of the following is the most likely explanation for inflation in the United States? In the long run, persistent inflation in the United States is caused by For supply-side inflation to occur in the long run, Which of the following can cause supply-side inflation? Suppose that an economy is initially producing at the full-employment level of output. Now suppose there is a reduction in the money supply. Other things being equal we can expect What will be the result in a growing economy if increases in aggregate demand outpace rightward shifts of the long-run aggregate supply curve? When the economy is in long-run equilibrium, the price level adjusts so as to equate which two values with one another? What pattern would you observe in an economy in which aggregate demand is increasing but in which long-run aggregate supply remained the same? Steadily improving improvements in technology, other things being equal, will result in When the aggregate demand curve shifts than the long-run aggregate supply shifts rightward, the result will be inflation. What would likely happen to the long-run aggregate supply curve if the U.S. federal government increases marginal tax rates on wages? Which of the following would unambiguously generate inflation? If long-run economic growth is not accompanied by a change in aggregate demand, the result will be

Title: CH10. Graded A
Description: CH10 1) The aggregate supply curve The total of all planned production for the entire economy is known as The long run aggregate supply curve (LRAS) also represents Long-run aggregate supply reflects The long-run aggregate supply curve is The long-run aggregate supply curve The long-run aggregate supply curve is vertical because The long-run aggregate supply curve What is measured on the vertical axis of the aggregate demand/aggregate supply model? Which of the following statements is TRUE? Long-run aggregate supply is The long-run aggregate supply curve is The long-run aggregate supply curve of an economy corresponds to If a nationʹs production possibilities curve shifts outward, we should expect its long-run aggregate supply curve to The full-employment and full-adjustment level of real Gross Domestic Product (GDP) in the economy is represented by A human resource such as ingenuity can be thought of as Which of the following will cause the long-run aggregate supply curve to shift? II. Changes in government spending. III. Changesinthemoneysupply. As the capital stock grows and technology improves, we would expect the long-run aggregate supply curve to The long-run aggregate supply will increase when A countryʹs long-run aggregate supply curve will shift to the left when there is (are) Over time in a growing economy, the long run aggregate supply curve will Aggregate supply is Economic growth can be depicted as An assumption on the LRAS curve is The total of all planned production for the economy is When talking about aggregate supply, it is necessary to C) distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. The real output of the economy under conditions of full employment . The full-employment level of GDP is The position of the long-run aggregate supply curve is determined by B) The long-run aggregate supply when resources are fully employed The long-run aggregate supply curve is The long run aggregate supply curve is vertical because The long-run aggregate supply curve occurs at the level of real GDP consistent with Which of the following does NOT affect the long-run aggregate supply curve? An increase in the level of prices of goods and services will do what to the long-run aggregate supply curve? The long-run aggregate supply curve is determined by all of the following EXCEPT The long-run aggregate supply curve can be thought of as the A) full-employment level of real GDP. The long-run aggregate supply curve will shift to the left when The long-run aggregate supply curve will shift outward to the right when The natural rate of unemployment will help determine Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve? Which of the following would cause the long-run aggregate supply curve to shift to the right? B) If our economy is growing at a constant rate of 5 percent per year, then over a period of 10 years we would expect to see which of the following? Economic growth can be thought of as Real GDP will increase over the long run if The aggregate supply curve cannot tell us The aggregate supply curve shows A) the total of all planned production for an economy. Aggregate supply D) is the total of all planned production in an economy. We draw the long-run aggregate supply curve as a vertical line to reflect the fact that B) changes in the price level do not alter the level of long-run real GDP after full adjustment has occurred. The level of real GDP identified by the long-run aggregate supply curve is A) the full-employment level of real GDP. What is measured on the vertical axis when we draw a graph of long -run aggregate supply? C) the price level The values on the axes of the long-run aggregate supply diagram are A) real GDP per year and the price level. When the production possibilities curve shifts outward, D) the long-run aggregate supply curve shifts to the right. What is measured on the horizontal axis when we draw a graph of the long -run aggregate supply curve? D) real GDP What causes the long-run aggregate supply curve to shift right? A) economic growth The long-run aggregate supply curve shifts right at the same time as B) the production possibilities curve shifts outward. A rightward shift of the long-run aggregate supply curve is caused by The long-run aggregate supply curve assumes that B) all factors of production are fully employed. The long-run aggregate supply curve is Long-run aggregate supply curve corresponds to B) real GDP when all resource costs have adjusted fully to a change in the price level. The slope of the long-run aggregate supply curve is D) undefined. Why is the long-run aggregate supply curve a vertical line? Long-run aggregate supply is C) the real production of goods and services after full adjustments have been made. Long-run aggregate supply and a countryʹs production possibility curve (PPC) A) are closely related. A long-run aggregate supply curve may graphically be represented as a A) vertical line. Economic growth is represented on the aggregate supply model by a B) shift in the long-run aggregate supply curve to the right. Economic growth can be shown by C) a rightward shift in the aggregate supply curve. Economic growth is demonstrated by the LRAS as it Economic growth causes the Which of these questions does aggregate demand help us answer? I. What determines the total amount of our output that individuals, firms, governments and foreigners want to buy? II. What is the economyʹs long-run real Gross Domestic Product (GDP)? III. Whatdeterminestheeconomyʹsequilibriumpricelevelandtherateofinflation? D) I and III The total level of all planned expenditures in the economy best describes B) aggregate demand. C) aggregate expenditures. All of the following explain the downward slope of the aggregate demand curve EXCEPT Other things being equal, the economyʹs aggregate demand curve shows that C) a change in the general price level causes a change in the quantity of final goods and services purchased. Aggregate demand reflects A) planned total spending in the economy. What is measured on the horizontal axis of the aggregate demand/aggregate supply model? The sum of all planned expenditures for the entire economy at each possible price level is B) aggregate demand The aggregate demand curve plots C) planned expenditures against the price level. The aggregate demand curve is usually The horizontal axis for an aggregate demand curve measures Which of the following is NOT a reason for the slope of the aggregate demand curve? At each price level, the aggregate demand curve indicates A) the total amount of real planned expenditures. The aggregate demand curve shows that, if other factors are held constant, According to the interest rate effect, an increase in the price level, if other factors are held constant, will lead to A) a reduction in total real spending on interest-rate-sensitive goods. The real-balance effect implies that when C) the price level increases, the value of money balances held by individuals, firms, government, and foreigners decreases and spending decreases. When prices increase, the real interest rate B) will increase and total planned spending on goods and services will decrease. The interest rate effect operates through A) credit markets by changing borrowing costs. When a change in the price level causes a change in the purchasing power of currency, which then changes planned real expenditures at all income levels, it is called One reason that the aggregate demand curve slopes downward is because A rise in the price level has a direct effect on spending because The real-balance effect shows that Another term for the real-balance effect is B) the wealth effect. If other factors are held constant, an increase in the price level The interest rate effect that helps explain the slope of the aggregate demand curve arises because Higher interest rates tend to A) reduce the total planned spending on goods and services. When interest rates rise, When the relative prices of U.S.-manufactured goods go up, the result is A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as If the price level increases, A) the buying power of your checking account falls. One impact of a rise in the dollarʹs value is that A) imports become cheaper for the U.S. consumer. An individual holds $10,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect A) the individualʹs real wealth to decrease and consumption to decline. A higher domestic price level should According to the interest rate effect, a decrease in the price level will When the U.S. price level falls, the open economy effect indicates that The aggregate demand curve differs from an individual demand curve in that B) the aggregate demand curve looks at the entire circular flow of income and product, while an individual demand curve looks at one good, holding everything else constant. How does aggregate demand curve (AD) differ from an individual demand curve (D)? Aggregate demand is B) the sum of all planned expenditures for the economy. The open economy effect suggests that The interest rate effect suggests that B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. The aggregate demand curve has Which of the following explains why the aggregate demand curve is downward sloping? Suppose that along the aggregate demand curve, real GDP equals $14.2 trillion when the GDP deflator is 90. If the GDP deflator were 95, real GDP along the aggregate demand curve would equal Other things being equal, along an aggregate demand curve, a higher price level is associated with Other things being equal, the lower are planned real expenditures along an aggregate demand curve, the When the price level increases, total planned real expenditures on goods and services falls. All of the following are responsible EXCEPT Which of the following is a factor that determines the shape of the aggregate demand curve? The change in total planned real expenditures resulting from a change in the real value of money balances when the price level changes, all other things held constant, is A) the real-balance effect. The real-balance effect refers to If you have $5000 and the GDP deflator decreases from 100 to 80 B) the $5000 will buy 20 percent more of the goods and services produced by society. The wealth effect is another term for the C) the real-balance effect. Holding nominal money balances constant, a decrease in the price level An indirect effect of an increase in the price level works through D) interest rates as people borrow to maintain their money balances, bidding up interest rates and reducing total planned real expenditures. The interest rate effect is part of the reason D) the aggregate demand curve is downward sloping. Which of the following statements is true about the interest rate effect? Higher interest rates A) reduce total planned real expenditures because they increase the cost of borrowing funds. If the price level increases, then The open economy effect refers to the fact that C) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S. goods by U.S. residents and foreign residents as a result of a higher price level. A shift away from expenditures on domestic goods and a shift toward expenditures on foreign goods when the domestic price level increases is known as Suppose a country has no trade with other countries and people can borrow as many funds as they want at the current interest rate. An increase in the price level will generate The aggregate demand curve Which of the following is NOT true about the aggregate demand curve? Which of the following is true about how the aggregate demand curve differs from the individualʹs demand curve? What determines the total value of aggregate demand for U.S. real GDP? Which one of the following is NOT a component of aggregate demand? The total of all planned real expenditures in the economy is called The aggregate demand curve shows Which of the following is NOT an explanation for the shape of the aggregate demand curve? The downward slope of the aggregate demand curve shows that What is one implication of the real-balance effect? The open economy effect and interest rate effect are two of the reasons why The aggregate demand curve shows the The aggregate demand curve is The aggregate demand curve is The real-balance effect indicates that at higher price levels Which of the following will occur when an economyʹs price level increases? The interest rate effect shows that if the price level increases, A decrease in U.S. prices relative to European prices An increase in U.S. prices relative to Japanese prices will When the price level declines, When the price level falls, The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called Which of the following cause the aggregate demand curve to slope downward and to the right? When a higher price level generates an increase in the interest rate that induces consumers to borrow less and buy less, this chain of events is referred to as Total planned real expenditures measured along the aggregate demand curve are made up of What is measured on the vertical axis of the aggregate demand graph? What is measured on the horizontal axis on the aggregate demand graph? When expenditures change due to changes in the real value of money caused by variations in the price level, this is known as the When total planned real expenditures change due to changes in the cost of borrowing that result from variations in the price level, this is known as the When total planned real expenditures change due to the changes in net exports, this is known as the If your income stays the same and the price level increases, you will buy fewer goods and services due to the If the dollar appreciates and foreign goods become less expensive, the total planned expenditures on domestic goods and services will Which of the following would cause aggregate demand to decrease? An aggregate demand curve Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right. Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. aggregate demand? An aggregate demand curve An increase in total planned real expenditures that is caused by a factor other than the price level will lead to the An increase in the money supply will cause which of the following to occur? The aggregate demand curve would shift to the right as a result of Which of the following will cause a leftward shift in the aggregate demand curve? Which one of the following would NOT increase aggregate demand? All of the following would cause the aggregate demand curve to shift EXCEPT Which of the following will NOT shift the aggregate demand curve? The aggregate demand curve will shift to the left if Which of the following will NOT shift the aggregate demand curve? An increase in the amount of money in circulation would cause a An increase in the U.S. price level causes a Which of the following would likely result in a shift of the aggregate demand curve to the right? An increase in aggregate demand is shown by Which of the following would likely result in a decrease in aggregate demand? Other things being equal, appreciation of the dollar Other things being equal, a depreciation of the dollar When investors buy more capital goods because the interest rates have fallen, the aggregate demand curve Which of the following would cause an increase in aggregate demand (AD)? Which of the following statements is correct? 1. I. A drop in the foreign exchange value of the dollar would decrease aggregate demand 2. II. A decrease in the amount of money in circulation would increase aggregate demand The shape of the aggregate demand curve does not tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need To find an economyʹs long-run equilibrium price level, locate the point where and cross and look to the left. Suppose total planned expenditures equal $14.4 trillion when the value of the price level is 95. If the price level dropped to 90, total planned real expenditures will equal If you have $1,000 and the Gross Domestic Product (GDP) deflator increases from 100 to 120, then A persistently declining price level resulting from economic growth and unchanged aggregate demand is called How is economic growth graphically depicted? Which of the following will result in secular deflation? Secular deflation occurs when An increase in the amount of physical capital will cause The U. S. has experienced inflation every year since 1959 due to Supply-side inflation is caused by If the economy grows steadily over several years and at the same time maintains the aggregate demand curve in its present position, then the economy will experience which of the following? Suppose the Federal Reserve implements expansionary monetary policy where the money supply increases. Which of the following will tend to occur in the long run as a result of this monetary policy action? When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve, Economic growth will be associated with a constant price level when Over the last twenty years, real GDP in the U.S. economy has increased and there has been inflation. This indicates that Economic growth takes place The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that In the long run, an increase in government spending, other things equal, generates The intersection of aggregate demand and long-run aggregate supply identify the price level at which total planned What would happen in an economy if total planned production exceeded total planned real expenditures? If the current price level is lower than the equilibrium price level, then it must be true that total planned If consumersʹ confidence in the economy rises, A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as If aggregate demand is stable and there is economic growth, the economy will experience A rightward shift of long-run aggregate supply without any change in aggregate demand An economy experiences real growth over time with stable aggregate demand. This would likely result in Which of the following is consistent with secular deflation? If persistent inflation was due to declines in long-run aggregate supply, what pattern would be observed? In an economy in which aggregate demand is stable and a period of sustained and significant productivity growth occurs, there will be What could cause a decrease in the price level and simultaneously an increase in GDP similar to the 1920s in the United States? Long-run equilibrium will occur at the price level at which Over the past several decades, what has been true about price levels in the United States? Supply-side inflation could be caused by which of the following? If there are steady decreases in aggregate supply, the economy will experience D) supply-side inflation. What has caused persistent inflation in the United States? A) The nationʹs long-run aggregate supply curve has shifted to the left. B) Supply-side inflation C) A decrease in labor productivity *[D) None of the above] Whenever the general level of prices rises because of continual increases in aggregate demand, we say that the economy is experiencing Demand-side inflation occurs when In looking back over the past 40 years, which of the following has the U.S. economy experienced? Which of the following factors could cause the economy to experience supply-side inflation? Supply side inflation can be caused by Which of the following is the main cause of the persistent inflation that we have experienced in the United A reduction the amount of oil (a resource) will tend to cause which of the following? If there is persistent inflation, Secular deflation Which of the following is the most likely explanation for inflation in the United States? In the long run, persistent inflation in the United States is caused by For supply-side inflation to occur in the long run, Which of the following can cause supply-side inflation? Suppose that an economy is initially producing at the full-employment level of output. Now suppose there is a reduction in the money supply. Other things being equal we can expect What will be the result in a growing economy if increases in aggregate demand outpace rightward shifts of the long-run aggregate supply curve? When the economy is in long-run equilibrium, the price level adjusts so as to equate which two values with one another? What pattern would you observe in an economy in which aggregate demand is increasing but in which long-run aggregate supply remained the same? Steadily improving improvements in technology, other things being equal, will result in When the aggregate demand curve shifts than the long-run aggregate supply shifts rightward, the result will be inflation. What would likely happen to the long-run aggregate supply curve if the U.S. federal government increases marginal tax rates on wages? Which of the following would unambiguously generate inflation? If long-run economic growth is not accompanied by a change in aggregate demand, the result will be