Macro Chapter 12B

Refer to the diagram. If the aggregate supply curve shifted from AS0 to AS1 and the aggregate demand curve remains at AD0, we could say that

aggregate supply has decreased, equilibrium output has decreased, and the price level has increased.

Graphically, the full-employment, low-inflation, rapid-growth economy of the last half of the 1990s is depicted by a

rightward shift of the aggregate demand curve and a rightward shift of the aggregate supply curve.

Graphically, demand-pull inflation is shown as a

rightward shift of the AD curve along an upsloping AS curve.

Refer to the diagram. If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be

F and C, respectively.

Graphically, cost-push inflation is shown as a

leftward shift of the AS curve.

Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, a decline in net exports caused by a change in incomes abroad is depicted by

A

In the accompanying table for a particular country, C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures are in billions of dollars. If the equilibrium level of reag GDP is $45 billion, its level of consumption will be

$26 billion.

The table gives aggregate demand and supply schedules for a hypothetical economy. The equilibrium price level will be

200

Which of the diagrams for the U.S. economy best portrays the effects of an increase in resource productivity?

A

Which of the diagrams for the U.S. economy best portrays the effects of declines in the prices of imported resources?

A

Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, inflation is absent in

A and C.

Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Cost-push inflation is depicted by

B

Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Growth, full-employment, and price stability are depicted by

C

Which of the diagrams for the U.S. economy best portrays an improvement in expected rates of return on investment?

C

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 the price level.

The table gives aggregate demand and supply schedules for a hypothetical economy. If the price level is 250 and producers supply $450 of real output,

a surplus of real output of $150 will occur.

Other things equal, an improvement in productivity will

shift the aggregate supply curve to the right.

Refer to the diagram. A shift of the aggregate demand curve from AD1 to AD0 might be caused by a(n)

increase in investment spending.

A rightward shift of the AD curve in the very flat part of the short-run AS curve will

increase real output by more than the price level.

A rightward shift of the AD curve in the very steep upper part of the short-run AS curve will

increase the price level by more than real output.