Macro chap 33

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which of the following will reduce the price level and real output in the short run

a decrease in the money supply

refer to figure 33-2. starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience

a rising price level and a falling level of output

refer to figure 33-2. point B represents

a short run equilibrium but not a long run equilibrium

refer to figure 32-2. the appearance of the long run aggregate supply curve

indicates that Y1 is the natural rate of output

refer to pessimism. what happens to the expected price level and whats the result for wage bargaining

the expected price level falls. bargains are stuck for lower wages

refer to stock market boom 2014. what happens to the expected price level and what impact does this have on wage bargaining

the expected price level rises. bargains are struck for higher wages

refer to optimism. what happens to the expected price level and whats the result for wage bargaining

the expected price level rises. bargains are stuck for higher wages

suppose that during the great depression long run aggregate supply shifted left. to be consistent with what happened to the price level and output, what would have had to happen to aggregate demand

it would have to shifted left by more than aggregate supply

an increase in the price level and a reduction in output would result from

natural disasters such as hurricanes, floods, and droughts

which of the following alone can explain the change in the price level and output during world war 2

aggregate demand shifted right

refer to pessimism. which curve shifts and in which direction

aggregate demand shifts left

refer to optimism. which curve shifts and in which direction

aggregate demand shifts right

refer to stock market boom 2014. which curve shifts and in which direction

aggregate demand shifts right

which of the following would increase output in the short run

all of the above are correct

in the last half of 1999, the US unemployment rate was about 4 percent. historical experience suggests that this is

below the natural rate , so real gdp growth was likely high

refer to stock market boom 2014. in the short run what happens to the price level and real gdp

both the price level and real gdp rise

historical evidence for the US economy indicates that

changes in real gdp over the business cycle are largely attributable to changes in investment over the business cycle

during recessions which type of spending falls

consumption and investment

during a recession the economy experiences

falling employment and income

the aggregate demand and aggregate supply graph has

quantity of output on the horizontal axis. output can be measured by real gdp

the long run effect of an increase in government spending is to

raise the price level and real output unchanged

suppose the economy is in long run equilibrium. senator A succeeds in getting taxes raised. at the same time, senator B succeeds in getting major new restrictions on logging enacted. in the short run

real gdp will fall and the price level might rise, fall, or stay the same

suppose the economy is in long run equilibrium if there is a tax cut at the same time that major new sources of oil are discovered in the country then is the short run

real gdp will rise and the price level might rise, fall, or stay the same

investment is

sensitive to interest rate changes, a small part of real gdp, yet it accounts for a large share of the fluctuation in real gdp

in the mid-1970s the price of oil rose dramatically. this

shifted aggregate supply left

refer to stock market boom 2014. in the long run, the change in price expectations created by the stock market boom shifts

short run aggregate supply left

refer to pessimism. in the long run, the change in price expectations created by pessimism shifts

short run aggregate supply right

most economists use the aggregate demand and aggregate supply model primarily to analyze

short run fluctuations in the economy

refer to optimism. in the long run, the change in price expectations created by optimism shifts

short-run aggregate supply left

refer to optimism. how is the new long-run equilibrium different from the original one

the price level is higher and real gdp is the same

refer to stock market boom 2014. how is the new long run equilibrium different from the original one

the price level is higher and real gdp is the same

refer to pessimism. how is the new long run equilibrium different from the original one

the price level is lower and real gdp is the same

the aggregate demand and aggregate supply graph has

the price level on the vertical axis. the price level can be measured by the gdp deflator

suppose that the ecomony is at long run equilibrium. if there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers the in the short run

the price level will fall, and real gdp might rise, fall or stay the same

suppose the economy is in long run equilibrium. concerns about pollution cause the government to significantly restrict the production of electricity. at the same time, the value of the dollar falls. in the short run

the price level will rise, and real gdp might rise, fall or stay the same

aggregate demand includes

the quantity of goods and services households, firm, the government and customers abroad want to buy

when production costs rise

the short run aggregate supply curve shifts to the left

refer to figure 33-1. if the economy starts at C, an increase in the money supply moves the economy

to A in the long run

refer to figure 33-1. if the economy starts at A and theres is a fall in aggregate demand, the economy moves

to C in the long run

which of the following is correct

when real gdp falls, the rate of unemployment rises


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