Macro chap 33
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