Chap 33 eco

During a recession the economy experiences?

falling employment and income

When we say that economic fluctuations are "irregular and unpredictable," we mean that?

recessions do not occur at regular intervals

The aggregate demand curve?

shows an inverse relation between the price level and the quantity of all goods and services demanded

Which of the following is included in the aggregate demand for goods and services?

consumption demand, investment demand, net exports

The effect of an increase in the price level on the aggregate demand curve is represented by a?

movement left along a given aggregate demand curve

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for?

the slope of the aggregate demand curve shift

The aggregate quantity of goods and services demanded changes as the price level rise because?

real wealth falls, interest rates rise, and the dollar appreciates

Other things the same, an increase in the price level makes the dollars people hold worth?

less, so they can buy less

Other things the same, an increase in the price level makes consumers feel?

less wealthy, so the quantity of goods and services demanded falls

As the price level rises?

people are less willing to lend, so interest rates rise.

When the price level falls?

people want to hold less money, the interest rate falls, investment spending rises

Other things the same, when the price level falls interest rates?

fall, so firms increase investment

Other things the same, if the price level rises, then domestic interest rates?

rise, so domestic residents will want to hold fewer foreign bonds

Other things the same, when the price level falls, interest rates?

fall, which means consumers will want to spend more on homebuilding

When the dollar depreciates, U.S.?

exports increase, while imports decrease

A decrease in the U.S. interest rates leads to?

a depreciation of the dollar that leads to greater net exports

When taxes increase, consumption?

decreases, so aggregate demand shifts left

Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital purchases. Their reaction would initially shift?

aggregate demand left

When the money supply increases?

interest rates fall and so aggregate demand shifts right

Which of the following both shift aggregate demand right?

net exports ruse for some reason other than a price change and the money supply rises

If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds?

the dollar would appreciate which would cause aggregate demand to shift left

Which of the following is not a determinant of the long run level of real GPD?

the price level

The long run aggregate supple curve shifts right if?

immigration from abroad increases, the capital stock increases, technology advances

Which of the following shifts long run aggregate supply right?

an increase in either the physical or human capital stock

The discovery of a large amount of previously undiscovered oil in the U.S. would shift?

the long run aggregate supple curve to the right

The aggregate supply curve us upward sloping in?

the short run but not the long run

The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected,?

production is more profitable and employment rises

Sticky nominal wages can result in?

lower profits for firms when the price level is lower than expected

The sticky-price theory of the short-run aggregate supply curve says that when the price level is higher than expected, some firms will have?

lower than desired prices which leads to an increase in the aggregate quantity of goods and services supplied

An increase in the expected price level shifts the?

the short-run but not the long-run aggregate supply curve left.

Which of the following shifts both short run and long run aggregate supply left?

a decrease in the capital stock

Which of the following would cause prices and real GPD to rise in the short run?

aggregate demand shifts right

If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level?

is lower and output is the same as the original long run equilibrium

In which case can we be sure real GDP rises in the short run?

foreign economies expand and taxes fall

An economic contraction caused by a shift in aggregate demand causes prices to?

fall in the short run and fall even more in the long run

Conaider the AS/AD model. Which of the following shifts the aggregate demand curve rightward?

an increase in consumer income

Suppose over the next several years, the price of oil in the U.S. falls dramatically. This change will likely lead to?

an increase(rightward shift) in short run aggregate supply

Which of the following will increase potential GDP (natural level of output)?

an increase in the full employment quantity of labor

Begin at full employment equilibrium. Assume the Fed increases the money supply, and the economy self-adjusts to full employment. When comparing the starting equilibrium to the final equilibrium, we find?

only the price level will be affected

Which of the following would result in a recession?

a drastic increase in the price of oil

Begin at full employment equilibrium. An increase in government expenditures on goods and services creates?

and inflationary gap and lower unemployment

Chap 33 eco - Subjecto.com

Chap 33 eco

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During a recession the economy experiences?

falling employment and income

When we say that economic fluctuations are "irregular and unpredictable," we mean that?

recessions do not occur at regular intervals

The aggregate demand curve?

shows an inverse relation between the price level and the quantity of all goods and services demanded

Which of the following is included in the aggregate demand for goods and services?

consumption demand, investment demand, net exports

The effect of an increase in the price level on the aggregate demand curve is represented by a?

movement left along a given aggregate demand curve

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for?

the slope of the aggregate demand curve shift

The aggregate quantity of goods and services demanded changes as the price level rise because?

real wealth falls, interest rates rise, and the dollar appreciates

Other things the same, an increase in the price level makes the dollars people hold worth?

less, so they can buy less

Other things the same, an increase in the price level makes consumers feel?

less wealthy, so the quantity of goods and services demanded falls

As the price level rises?

people are less willing to lend, so interest rates rise.

When the price level falls?

people want to hold less money, the interest rate falls, investment spending rises

Other things the same, when the price level falls interest rates?

fall, so firms increase investment

Other things the same, if the price level rises, then domestic interest rates?

rise, so domestic residents will want to hold fewer foreign bonds

Other things the same, when the price level falls, interest rates?

fall, which means consumers will want to spend more on homebuilding

When the dollar depreciates, U.S.?

exports increase, while imports decrease

A decrease in the U.S. interest rates leads to?

a depreciation of the dollar that leads to greater net exports

When taxes increase, consumption?

decreases, so aggregate demand shifts left

Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital purchases. Their reaction would initially shift?

aggregate demand left

When the money supply increases?

interest rates fall and so aggregate demand shifts right

Which of the following both shift aggregate demand right?

net exports ruse for some reason other than a price change and the money supply rises

If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds?

the dollar would appreciate which would cause aggregate demand to shift left

Which of the following is not a determinant of the long run level of real GPD?

the price level

The long run aggregate supple curve shifts right if?

immigration from abroad increases, the capital stock increases, technology advances

Which of the following shifts long run aggregate supply right?

an increase in either the physical or human capital stock

The discovery of a large amount of previously undiscovered oil in the U.S. would shift?

the long run aggregate supple curve to the right

The aggregate supply curve us upward sloping in?

the short run but not the long run

The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected,?

production is more profitable and employment rises

Sticky nominal wages can result in?

lower profits for firms when the price level is lower than expected

The sticky-price theory of the short-run aggregate supply curve says that when the price level is higher than expected, some firms will have?

lower than desired prices which leads to an increase in the aggregate quantity of goods and services supplied

An increase in the expected price level shifts the?

the short-run but not the long-run aggregate supply curve left.

Which of the following shifts both short run and long run aggregate supply left?

a decrease in the capital stock

Which of the following would cause prices and real GPD to rise in the short run?

aggregate demand shifts right

If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level?

is lower and output is the same as the original long run equilibrium

In which case can we be sure real GDP rises in the short run?

foreign economies expand and taxes fall

An economic contraction caused by a shift in aggregate demand causes prices to?

fall in the short run and fall even more in the long run

Conaider the AS/AD model. Which of the following shifts the aggregate demand curve rightward?

an increase in consumer income

Suppose over the next several years, the price of oil in the U.S. falls dramatically. This change will likely lead to?

an increase(rightward shift) in short run aggregate supply

Which of the following will increase potential GDP (natural level of output)?

an increase in the full employment quantity of labor

Begin at full employment equilibrium. Assume the Fed increases the money supply, and the economy self-adjusts to full employment. When comparing the starting equilibrium to the final equilibrium, we find?

only the price level will be affected

Which of the following would result in a recession?

a drastic increase in the price of oil

Begin at full employment equilibrium. An increase in government expenditures on goods and services creates?

and inflationary gap and lower unemployment

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