Econ

The aggregate supply curve (short-run) is up sloping because:

per-unit production costs rise as the economy moves toward and beyond its full-employment output.

An increase in net exports will shift the AD curve to the:

right by a multiple of the change in investment.

Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate:

supply curve will shift rightward.

Which one of the following would not shift the aggregate demand curve?

Change in the price level

Cost push inflation:

Inflation that begins with an increase in cost.

Demand-pull inflation:

Inflation that starts because aggregate demand increases.

The real-balance effect indicates that:

a higher price level will decrease the real value of many financial assets and therefore reduce spending.

The interest-rate effect suggests that:

an increase in the price level will increase the demand for money, increase interest rates and decrease consumption and investment spending.

Intrest-rate effect

an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.

Other things equal, appreciation of the dollar:

decreases aggregate demand in the US and may increase aggregate supply by reducing the prices of imported resources.

The determinants of aggregate supply:

include resources prices and resource productivity.

Other things equal, a reduction in personal and business taxes can be expected to:

increase both aggregate demand and aggregate supply.

The aggregate supply curve (short run):

is steeper above the full employment output than below it.

A decline in investment will shift the AD curve to the:

left by a multiple of the change in investment.

Demand curve slopes?

Down, usually depicted by AD decreases when prices go up. Increases when prices drop.

Aggregated demand increases if? (Whole new curve)

Expected income, inflation, or profits increase. The government or federal reserves increase planned expenditures. Exchange rate falls or the global economy increases. Direct opposite if the line shifts leftwards.

How does the quantity of real GDP supplied increase when the price level rises?

If at first ketchup costs $1 per hour and you're paying your workers $20 per hour it takes 20 bottles this is the real wage rate If now you sell ketchup for $2 per bottle selling the same amount would increase the potential GDP.

The aggregate supply curve (short-run) is upsweeping because?

Per-unit production costs rise as the level of production of an economy increases toward and beyond its full-employment real output.

If investment increases by $10 billion and the economy MPC is .8, the aggregate demand curve will shift?

Rightwards by $50 billion at each price level. 1 ------- * 10 (1-.8)

Aggregated supply curve slopes?

Up, depicted by AS

The aggregate supply curve (short-run) slopes upward and to the right because?

Wages and other resource prices adjust only slowly to change in the price level.

The aggregate demand curve:

shows the amount of real output that will be purchased at each possible price level.

If aggregate demand decreases, and as a result, real output and employment decline but the price level remains unchanged, we can assume that:

the price level is inflexible downward and a recession has occurred.

The aggregate supply curve (short-run) slopes upward and to the right because:

wages and other resource prices adjust only slowly to changes in the price level.

If the dollar price of foreign currencies falls (that is, the dollar appreciates), we would expect:

aggregate demand to decrease and aggregate supply to increase.

Other things equal, if the US dollar were to depreciate, the:

aggregate supply curve would shift to the left.

The economy's long-run AS curve assumes that wages and other resource prices:

eventually rise and fall to match upward or downward changes in price level.

The foreign purchases effect suggests that an increase in U.S. price level relative to other countries will:

increase U.S. imports and decrease U.S. exports.

The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will:

increase U.S. imports and decrease U.S. exports.