econ exam 2 (3)
the immediate-short0run aggregate supply curve represent circumstances where
both input and output prices are fixed
When aggregate demand declines, the price level may remain constant, at least for a time, because
firms individually may fear that their price cut may set off a price war.
Other things equal, a reduction in personal and business taxes can be expected to
increase both aggregate demand and aggregate supply
the aggregate demand curve
shows the amount of real output that will be purchased at each possible price level.
the aggregate supply curve (short run)
slopes upward and to the right.
The equilibrium price level and level of real output occur where
the aggregate demand and supply curves interest
The real-balance, interest-rate, and foreign purchase effects all help explain
why the aggregate demand curve is downsloping
If aggregate demand increases and aggregate supply decreases, the price level:
will increase, but real output may increase, decrease or remain unchanged
which of the diagrams for the U.S economy best portrays the effects of an increase in foreign spending on U.S products?
C.
The immediate-shot-run aggregate supply curve is
horizontal
the determinants of aggregate supply
include resource prices and resource productivity
In the diagram, a shift from AS1 to AS3 ight be caused by a(n)
increase in the price of imported resources
An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. the per-unit cost of production in this economy is
$0.10
suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. The per-unit cost of production in the economy described is
$2
Refers to the diagram, 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 aboard is depicted by
A
Refer to the diagram, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. A recession is depicted by
A and B
Refers to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, an increase in investment spending is depicted by
C.
which if the diagrams for the U.S economy best portrays the effects of a decrease in the availability of key natural resources?
B
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
which of the diagrams for the U.S economy best portrays the effects of a substantial reduction in government spending
D
The aggregate demand curve shows the
Inverse relationship between the price level and the quantity of real GDP purchased
Which of the following would not shift the aggregate supply curve?
an increase in the price level
Prices and wages tend to be:
flexible upward, but inflexible downward.
the economy's long-run aggregate supply curve
is vertical
Graphically, cost-push inflation is shown as a:
leftward shift of the AS curve.
An increase in net exports will shift the AD curve to the
right by a multiple of the change in net exports
In the diagram, the economy's immediate-short-run AS curve is line ______, its short-run AS curve is _____, and its long-run AS curve is line ______.
3; 2; 1
which one of the following would not shift the aggregate demand curve?
a change in the price level
other things equal, if the U.S dollar were to depreciate, the
aggregate supply curve would shift to the left
Which if the following would most likely reduce aggregate demand (shift the AD curve to the left)?
an appreciation of the U.S dollar
Which of the following would most likely shift the aggregate demand curve to the right?
an increase in stock prices that increase consumer wealth
The interest-rate effects suggest that
an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending
Menu costs
are the costs to firms of changing prices and communicating them to customers.
per-unit production cost is
total input cost divided by units of output.
The shape of the immediate-short-run aggregate supply curve implies that:
total output depends on the volume of spending
Other things equal, a decrease in the real interest rate will
expand investment and shift the AD curve to the right
Other things equal, an improvement in productivity will
shift the aggregate supply curve to the right
Other things equal, appreciation of the dollar
decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources.
The factors that affects the amount that consumers, businesses, government, and foreigners wish to purchase at each price level are the
determinants of aggregate demand
Graphically, demand-pull inflation is shown as a:
rightward shift of the AD curve along an upsloping AS curve.
