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Exam 14: The Aggregate Model of the Macro Economy

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Question 51

True/False

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Increases in autonomous spending cause leftward shifts of the aggregate demand and supply curves.

A) True
B) False

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Question 52

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The portion of the short-run aggregate supply that reflects the economy's resources are not fully employed is the:

A) vertical portion.
B) horizontal portion.
C) upward sloping portion.
D) none of the above.

E) A) and C)
F) A) and B)

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Question 53

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Why did the Fed shift its policy target towards the federal funds rate.

A decrease in the currency exchange rate would shift the aggregate demand curve rightward, resulting in a higher equilibrium income and price level in the long-run.

At a given price level, an increase in stock market wealth will shift the aggregate demand curve:

A vertical curve that defines the level of full-employment or potential output based on a given amount of resources, efficiency, and technology in the economy is called:

Leading, coincident, and lagging indicators are based on the concept that:

During the recession of 2007-2009, the U.S.economy was experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence.What components of aggregate demand were affected and what was the impact on real output? What were the policy options?

A curve that shows the price level at which firms in the economy are willing to produce different levels of goods and services and the resulting level of real income is called:

An increase in resources available would decrease potential GDP and the long-run aggregate supply curve.

Using the aggregate demand-aggregate supply diagram, graphically illustrate and explain the impact of an appreciation of the U.S.dollar on the price level and real income in the short.

Average weekly hours in manufacturing is an example of a:

A decrease in government expenditure would shift the:

The aggregate production function shows the quantity and quality of resources used in production given the efficiency with which resources are utilized and the prevailing technology.

The curve that shows alternative combinations of the price level and real income that result in equilibrium in both the real goods and the money markets is called the:

What are the reasons for a decrease in the NAIRU.

The decrease in consumption and investment interest-related spending that occurs when the interest rate rises as government spending increases is called:

A depreciation of the U.S.dollar would shift the: