Question 1

Explain how a recession differs from a depression.

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Question 2

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 3

Suppose a recession overseas reduces a country's exports. Which curve(s) 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 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 5

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

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Question 6

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

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Question 7

What curve shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level?

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Question 8

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

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Question 9

A decrease in the money supply will shift the long-run aggregate-supply curve to the left.​

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A decrease in the money supply will not affect the long-run aggregate-supply curve. It will only affect the short-run aggregate-supply curve and cause a contractionary shift to the left.

Question 10

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 11

Name two macroeconomic variables that decline when an economy goes into recession, and name one macroeconomic variable that rises.

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Question 12

Identify the direction of the change during a recession in each of the following: consumption expenditures, investment expenditures, and unemployment.

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Question 13

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 14

Figure 33-12. 
-Refer to Figure 33-12. Explain how the aggregate demand and aggregate supply model changed during periods 1 and 2.

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-Refer to Figure 33-12. Explain...

Question 15

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 16

Briefly state the three key facts about economic fluctuations.

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Question 17

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

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Question 18

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 19

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

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Question 20

Figure 33-12. 
-Refer to Figure 33-12. Identify periods 1 and 2.

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-Refer to Figure 33-12. Identify...

Quiz 33: Aggregate Demand and Aggregate Supply