Question 1

Suppose a country experiences a change in weather patterns that makes farming more difficult. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

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Question 2

The wealth effect helps explain what feature in the aggregate demand and aggregate supply model?

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Question 3

Suppose a recession overseas reduces a country's exports. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

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Question 4

Suppose a boom in stock market prices helps make people feel wealthier. Using the model of aggregate demand and aggregate supply, identify the curves that are affected, and which way these curves would shift.

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Question 5

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

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Question 6

List the three reasons for why the aggregate-demand curve slopes downward.

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Question 7

List the three alternative explanations for the upward slope of the short run aggregate supply curve.

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Question 8

Suppose a country experiences an increase in its capital stock. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

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Question 9

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

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Question 10

Suppose a country offers a new investment tax credit. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

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Question 11

Suppose speculators lost confidence in foreign economies and bought more U.S. bonds. How would this affect net exports in the U.S., and which way would this cause the aggregate demand curve to shift?

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Question 12

Suppose technology advances within a nation. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

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Question 13

Identify the variables that could cause shifts in both the short-run and long-run aggregate-supply curves.

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Question 14

Suppose a nation experiences increased immigration from abroad. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

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Question 15

Misperceptions theory helps explain what feature of the aggregate demand and aggregate supply model?

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Question 16

Explain how a change in the expected price level would shift the short-run and long-run aggregate-supply curves.

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Question 17

Suppose the government raises taxes. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?

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Question 18

A decrease in what variable will raise the quantity of goods and services supplied, and shift only the short run aggregate supply curve to the right?

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Question 19

Suppose people anticipate an increase in the expected price level. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

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Question 20

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

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Quiz 15: Aggregate Demand and Aggregate Supply