Wk 3 - Practice: Aggregate Demand and Supply Part I [due Day 5]

If consumers decrease the amount of spending, aggregate demand shifts to the ______.

left

If consumers increase the amount of spending, the aggregate demand curve shifts to the .

right

In the short run, a shift of the aggregate supply curve to the _______ indicates increasing production at every price level.

right

If resource costs ______, output decreases at every price level.

rise

Changing one of the determinants of aggregate supply will cause the aggregate supply curve to _______.

shift

Changes in consumption and gross investment can:

shift the aggregate demand curve.

In the ____ run, the aggregate supply curve slopes upward.

short

The relationship between the price level and the amount of real GDP supplied in the economy is called:

short-run aggregate supply. aggregate supply.

Aggregate ______ illustrates how the total amount of goods and services produced in an economy relates to the price level.

supply

Generally changes to social institutions that inhibit production decrease aggregate:

supply

Higher resource costs will shift the aggregate ______ curve to the left.

supply

Which of the following statements about demand and aggregate demand are true?

- We use demand to talk about the price and quantity of a single good or service produced in a specific market. - We use aggregate demand to describe the overall or total demand for all final goods and services produced in an economy.

Which of the following will result in a rightward shift of the aggregate demand curve?

An increase in consumption spending An increase in investment

______ demand describes the overall or total demand for all final goods and services produced in an economy.

Aggregate

______ demand includes the demand for goods and services as diverse as food, clothing, cars, health care, entertainment, and housing.

Aggregate

________ can be interpreted as the overall demand for real GDP from Consumption Gross Investment Government Purchases and Net Exports.

Aggregate demand

_______ demand includes the demand for goods and services as diverse as food, clothing, cars, health care, entertainment, and housing.

Blank 1: Aggregate or aggregate

If consumers _____ the amount of spending, the aggregate demand curve shifts to the left.

Blank 1: decrease, reduce, lower, limit, or decreases

In the short run, input prices are ______ and do not adjust along with other prices in the economy.

Blank 1: fixed, constant, static, sticky, inflexible, or rigid

The aggregate demand curve is _____ sloping.

Blank 1: negative, inverse, down, or downward

Improved productivity means that we can produce more ______ with fewer _____.

Blank 1: output, product, products, goods, or outputs Blank 2: input, inputs, resources, or factors

In an aggregate demand model, price level is on the ____ axis and the dollar value of real gross domestic product is on the ____ axis.

Blank 1: vertical, y, or Y Blank 2: horizontal, x, or X

Which of the following are the three broad categories of the determinants of aggregate supply?

Productivity, Resource prices, Social institutions

During the Great Recession from 2007 to 2009, most countries increased government expenditures to boost aggregate demand.

True

_____ demand can be interpreted as the overall demand for real GDP from four different sources.

aggregate

We use _______ to talk about the price and quantity of a single good or service produced in a specific market. We use _______ to describe the overall, or total, demand for all final goods and services produced in an economy.

demand; aggregate demand

Aggregate demand is:

downward sloping.

One of the challenges of using government expenditures to stimulate the economy is that:

eventually the spending must return to their previous levels which may adversely affect aggregate demand in the economy.

If consumers ____ the amount of spending, aggregate demand curve shifts to the right.

increase

When the price level increases in the short run, output will expand because profit margins _______.

increase

When the price level _____ in the short run, output will expand because profit margins increase.

increases

Aggregate supply illustrates how the total amount of goods and services produced in an economy relates to the ____ level.

price

Input ____ tend to be sticky.

prices

______ is defined as the total amount of output produced with a given level of inputs.

productivity

In the short run, the aggregate supply curve slopes _____.

upward