Question 1

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 2

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 3

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 4

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

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Question 5

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 6

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 7

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

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Question 8

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

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Question 9

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 10

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

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Question 11

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

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Question 12

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 13

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 14

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

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Question 15

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 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 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 18

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 19

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 20

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

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Quiz 23: Aggregate Demand and Aggregate Supply