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The ________ shows the relationship between the price level and quantity of real GDP demanded.
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Because of the slope of the aggregate demand curve, we can say that a decrease in the price level
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ECON 2305 HW #11
| The ________ shows the relationship between the price level and quantity of real GDP demanded. | aggregate demand curve |
| Because of the slope of the aggregate demand curve, we can say that a decrease in the price level | leads to a higher level of real GDP demanded. |
| An increase in the price level results in a(n) ___________ in the quantity of real GDP demanded because ___________. | decrease; a higher price level reduces consumption, investment, and net exports. |
| An increase in the price level will | move the economy up along a stationary aggregate demand curve. |
| Suppose the U.S. GDP growth rate is faster relative to other countries' GDP growth rates. U.S. imports will therefore increase faster than U.S. exports, and this will | shift the aggregate demand curve to the left. |
| If aggregate demand just increased, which of the following may have caused the increase? | an increase in government purchases |
| Refer to the figure to the right. Ceteris paribus, an increase in the price level would be represented by a movement from | point B to point A |
| Refer to the figure to the right. Ceteris paribus, an increase in interest rates would be represented by a movement from | AD2 to AD1. |
| Refer to the figure to the right. Ceteris paribus, an increase in personal income taxes would be represented by a movement from | AD2 to AD1. |
| Refer to the figure to the right. Ceteris paribus, a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from | AD2 to AD1 |
| Refer to the figure. Ceteris paribus, a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP result in U.S. exports increasing faster than U.S. imports. This would be represented by a change from | AD1 to AD2. |
| According to the "wealth effect," when the ________ falls, the ________ rises. | price level; the real value of household wealth |
| Which of the following best describes the "interest rate effect"? | An increase in the price level raises the interest rate and chokes off investment and consumption spending. |
| Which of the following will shift the aggregate demand curve to the left, ceteris paribus? | an increase in interest rates |
| The level of aggregate supply in the long run is not affected by | changes in the price level. |
| Potential GDP refers to the level of | Real GDP in the long run. |
| If stricter immigration laws are imposed and many foreign workers in the United States are forced to go back to their home countries, | the long-run aggregate supply curve will shift to the left. |
| Full-employment GDP is also known as | potential GDP |
| On the long-run aggregate supply curve, | a decrease in the price level has no effect on the aggregate quantity of GDP supplied. |
| The long-run aggregate supply curve will shift to the right if the economy | experiences technological change. |
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