Which of the following is correct? a. A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left. b. An increase in the money supply causes the interest rate to decrease so that aggregate demand shifts left. c. An increase in stock prices reduces consumption spending so that aggregate demand shifts left. d. An increase in the price level causes the exchange rate to rise so that aggregate demand shifts lef

Which of the following is correct? a. A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left. b. An increase in the money supply causes the interest rate to decrease so that aggregate demand shifts left. c. An increase in stock prices reduces consumption spending so that aggregate demand shifts left. d. An increase in the price level causes the exchange rate to rise so that aggregate demand shifts lef

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 14QP

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During 2015, there was a substantial increase in stock prices, as well as a reduction in the world price of crude oil. How did the stock and oil price changes influence aggregate demand and aggregate supply in the United States? Check all that apply. These two changes would result in a temporary increase in output. The decrease in the world price of crude oil would cause the SRAS curve to shift to the right. The decrease in the world price of crude oil would cause the LRAS curve to shift to the left. The increase in stock prices would cause the AD curve to shift to the right.
In the aggregate demand and aggregate supply model, when does the aggregate quantity of goods demanded increase? Multiple choice a. when the dollar appreciates b. when real wealth rises c. when the interest rate rises d. when the expected price level rises.
Which of the following would increase current Aggregate Demand in an country? Select one: a) Highest interest rates b) Avaialbel of less savings schemes c) Falling growth d) Higher taxes e) Precautionary savings
Refer to the figure at right. Suppose the equilibrium moves from E' to E. An event that could have caused this movement is A. an increase in the perceived stability of the U.S. economy. B. an increase in U.S. productivity. C. an increase in the real interest rate in the United States. D. an increase in demand for Japanese−produced goods by U.S. residents.
State whether each of the following transactions is a part of aggregate demand in the United States, and whether it is C, I, G, X, or IM. a. David buys a keyboard synthesizer made in the United States b. A Japanese automaker buys stock in an American auto company c. A Japanese automaker builds an assembly plant in Illinois d. Will buys a compact disc player made in Japan e. Dieter, a German resident, buys frozen chickens that were raised in the United States f. The U.S. government sends an insurance check to Renee, an unemployed keypunch operator.
A closed economy was observed in two different years to be operating with levels of output at: (a) aggregate supply was equal aggregate demand for goods and services but planned domestic investment was greater than planned domestic saving ( b) aggregate supply was equal aggregate demand for goods and service but planned domestic investment was less than planned domestic saving. Use a diagram to explain the forces that would move the economy towards a stable equilibrium in each case.
Which of the following is likely to result from a rapid rise in aggregate demand? Select one: a. Static living standards b. Increased unemployment c. Rising prices d. Surplus on the balance of payments
other things equal, which of the following would be expected to shift aggregate demand to the right? 1. A decrease in the price level 2. Many of our major trading partners experience a recession 3. A decline in business confidence about future growth 4. an increase in home values.
Which of the following help to explain why the aggregate demand curve slopes downward? a. When the domestic price level rises, our goods and services become more expensive to foreigners. b. When government spending rises, the price falls. c. There is an inverse relationship between consumer expectations and personal taxes. d. When the price level rises, the real value of financial assets (like stocks, bonds, and savings account balances) declines. Label each of the following descriptions as being either an immediate-short-run aggregate supply curve, a short-run aggregate supply curve, or a long-run aggregagte supply curve. a. A vertical line b. The price level is fixed c. Output prices are flexible, but input prices are fixed d. A horizontal line e. An upsloping curve f. Output is fixed What effects would each of the following have on aggregate demand or aggregate supply, other things equal? In each case, use a diagram to show the expected effects on the equilibrium price level…
If countries that imported from the United States went into recession, we expect that U.S. net exports would _________ rise, making the aggregate demand shift right. rise, making aggregate supply shift left. fall, making aggregate supply shift right. fall, making aggregate demand shift left.
Other things the same, the aggregate quantity of goods demanded decreases if a. real wealth falls. b. the interest rate rises. c. the dollar appreciates. d. All of the above are correct.
If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left.

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	a.	A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left.
	b.	An increase in the money supply causes the interest rate to decrease so that aggregate demand shifts left.
	c.	An increase in stock prices reduces consumption spending so that aggregate demand shifts left.
	d.	An increase in the price level causes the exchange rate to rise so that aggregate demand shifts left.