Macro Econ new part 2

An increase in household saving causes consumption to

fall and aggregate demand to decrease.

The economic boom of the early 1940s resulted mostly from

increased government expenditures.

The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected,

production is more profitable and employment rises.

Aggregate demand shifts right if at a given price level

taxes fall and shifts right if the money supply increases.

Which of the following can explain the upward slope of the short-run aggregate supply curve?

nominal wages are slow to adjust to changing economic conditions

In 1986, OPEC countries increased their production of oil. This caused

aggregate supply to shift right.

Other things the same, an increase in the price level makes the dollars people hold worth

less, so they can buy less.

The quantity of aggregate goods and services demanded rises when the

price level falls, because the interest rate falls.