Aggregate Demand & Supply
In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect ths to:
increase aggregate demand
Which of the following would not shift the aggregate demand curve?
Productivity rates
A decrease in the price of crude oil would most likely:
increase aggregate supply in the U.S.
Which combination of factors would most likely increase aggregate demand?
An increase in consumer wealth and a decrease in interest rates.
The economy experiences a decrease in the price level and an increase in real domestic output. Which is a likely explanation?
Business costs and wage rates have decreased.
When the general price level in our economy increases, which of the following effects does NOT occur?
The purchasing power of people's savings will increase.
Which would most likely increase aggregate supply?
an increase in productivity
The short-run aggregate supply curve is most likely to shift to the right if:
input prices decrease
Which of the following effects best explains the downward slope of the aggregate demand curve?
An interest-rate effect
The economy experiences an increase in the price level and a decrease in real domestic output. Which is likely an explanation?
Input prices have increased.
If the dollar appreciates in value relative to foreign currencies, aggregate demand:
decreases because net exports decrease
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
Congress's passage of new laws significantly increasing the regulation of business would tend to:
increase per-unit production costs and shift the aggregate supply curve to the left
If the national incomes of our trading partners increase, then our aggregate demand:
increases because net exports increase
If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium:
output would necessarily rise
Suppose that oil prices increase sharply while the rate of growth in labor productivity declines. The combination of these two factors should:
shift the short-run aggregate supply curve to the left
