Supply and Demand and Stationary Aggregate Demand Essay

4064 Words Jun 22nd, 2014 17 Pages
Macroeconomics, (Hubbard/O’Brien)
Chapter 24 Aggregate Demand and Aggregate Supply Analysis 1)

The static aggregate demand and aggregate supply curve model helps explain
A)

short term fluctuations in real GDP and the price level.
B)

long term growth.
C)

price fluctuations in an individual market.
D)

output fluctuations in an individual market.

2)

The aggregate demand curve shows the relationship between the ________ and ________.
A)

inflation rate; quantity of real GDP demanded
B)

real interest rate: quantity of real GDP supplied
C)

nominal interest rate; quantity of real GDP demanded
D)

price level; quantity of real GDP demanded

3)

Because of the slope the
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12)

The impact of hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A)

This will move the economy up along a stationary aggregate demand curve.
B)

This will move the economy down along a stationary aggregate demand curve.
C)

This will shift the aggregate demand curve to the left.
D)

This will shift the aggregate demand curve to the right. 13)

If the U.S. dollar increases in value relative to other currencies, how does this affect the aggregate demand curve?
A)

This will move the economy up along a stationary aggregate demand curve.
B)

This will move the economy down along a stationary aggregate demand curve.
C)

This will shift the aggregate demand curve to the left.
D)

This will shift the aggregate demand curve to the right. 14)

Suppose the U.S. GDP growth rate is slower relative to other countries' GDP growth rates. This will
A)

move the economy up along a stationary aggregate demand curve.
B)

move the economy down along a stationary aggregate demand curve.
C)

shift the aggregate demand curve to the left.
D)

shift the aggregate demand curve to the right. 15)

How does an increase in the price level in the U.S. relative to the price level of other countries affect the aggregate demand

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