aggregate demand and supply

what does the aggregate demand curve look like? a. a downward-sloping line b. an upward-sloping line c. a horizontal line d. a vertical line

a. a downward-sloping line

The foreign purchases, interest rate, and real-balances effects explain why the a. aggregate demand curve is downward-sloping. b. aggregate demand curve may shift to the left or right. c. economy will adjust towards equilibrium. d. aggregate expenditures schedule may shift up or down.

a. aggregate demand curve is downward-sloping

The economy's long-run AS curve assumes that wages and other resource prices a. eventually rise and fall to match upward or downward changes in the price level. b. are flexible upward but inflexible downward. c. rise and fall more rapidly than the price level. d. are relatively inflexible both upward and downward.

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

If the price level decreases, then the aggregate expenditures schedule will shift and this translates into a a. movement down along the aggregate demand curve. b. shift in aggregate demand to the right. c. shift in aggregate demand to the left. d. movement up along the aggregate demand curve.

a. movement down along the aggregate demand curve

The short-run version of aggregate supply assumes that product prices are a. fixed while resource prices are flexible. b. flexible while resource prices are fixed. c. both input and product prices are flexible. d. both input and product prices are fixed.

b. flexible while resource prices are fixed

An expected increase in the prices of consumer goods in the near future will a. decrease (or shift left) in aggregate demand now. b. increase (or shift right) in aggregate demand now. c. decrease in the quantity of real output demanded (or movement up along AD). d. increase in the quantity of real output demanded (or movement down along AD).

b. increase (or shift right) in aggregate demand now

An increase in productivity will a. increase aggregate demand. b. increase aggregate supply. c. increase aggregate supply and aggregate demand. d. decrease aggregate supply and aggregate demand.

b. increase aggregate supply

In which of the following sets of circumstances can we confidently expect inflation? a. Aggregate supply and aggregate demand both increase. b. Aggregate supply and aggregate demand both decrease. c. Aggregate supply decreases and aggregate demand increases. d. Aggregate supply increases and aggregate demand decreases.

c. aggregate supply decreases and aggregate demand increases

A decrease in government spending will cause a(n) a. increase in the quantity of real output demanded. b. decrease in the quantity of real output demanded. c. decrease in aggregate demand. d. increase in aggregate demand.

c. decrease in aggregate demand

With cost-push inflation in the short run, there will be a(n) a. increase in real GDP. b. leftward shift in the aggregate demand curve. c. decrease real GDP. d. decrease in unemployment.

c. decrease real GDP

The aggregate demand curve or schedule shows the relationship between the total demand for output and the a. income level. b. interest rate. c. price level. d. real GDP.

c. price level

The aggregate supply curve (short run) a. slopes downward and to the right. b. graphs as a vertical line. c. slopes upward and to the right. d. graphs as a horizontal line.

c. slopes upward and to the right

what is the relationship between aggregate expenditures and aggregate demand? a. As price falls, the AE curve shifts down, resulting in lower equilibrium real GDP. b. An increase in AE causes the price level to fall, moving us to a new, lower point on the AD curve. c. As price rises, the AD curve shifts to the left, resulting in lower equilibrium real GDP. d. As price rises, the AE curve shifts down, moving us to a point further down the AD curve.

d. as price rises, the AE curve shifts down, moving us to a point further down the AD curve

An increase in aggregate demand is most likely to be caused by a(n) a. increase in real interest rates. b. decrease in government spending. c. decrease in expected returns on investment. d. decrease in the tax rates on household income.

d. decrease in the tax rate on household income

If the national incomes of our trading partners increase, then our aggregate demand a. decreases because consumption decreases. b. increases because consumption increases. c. decreases because net exports decrease. d. increases because net exports increase.

d. increases because net exports increase

Which would most likely shift the aggregate supply curve? A change in the prices of a. domestic products. b. foreign products. c. financial assets. d. resources.

d. resources

The long-run aggregate supply curve is a. upward-sloping and becomes steeper at output levels above the full-employment output. b. upward-sloping and becomes flatter at output levels above the full-employment output. c. horizontal. d. vertical.

d. vetical