Chapter 13 questions
Consider the world oil market diagrams presented in the figure. Which panel correctly depicts what happened in the market for oil during the 1973 OPEC oil crisis?
Panel B
The long-run growth potential of an economy does not depend on the level of inflation
True
Which of the following causes a shift of the AD curve to the right?
an increase in consumer confidence
the aggregate demand curve is
downward sloping
In 1931, the Federal Reserve
failed to respond to the banking crisis
If spending in an economy increase by 3% and real GDP increases 1% , the result will be
inflation
In the equation M + v = P + YR, what does P stand for?
inflation
The term "business fluctuations" refers to
movement in real GDP around its long term trend
a positive real shock causes the aggregate demand curve to:
not shift at all
The economy's potential or "Solow: growth rate fluncates over time because of
real shocks
Holding everything else constant, an increase in the growth rate of the money supply will cause the aggregate demand curve to:
shift outward
Decreased import growth represents a positive AD shock
True
During the great Depression, the U.S. aggregate demand curve?
shifted inward
An increase in the growth rate of velocity shifts the aggregate demand curve to the right
true