Question 1

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 2

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

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Question 3

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

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Question 4

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 5

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

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Question 6

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 7

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 8

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 9

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 10

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

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Question 11

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

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Question 12

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 13

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 14

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

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Question 15

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 16

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 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

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 19

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

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Question 20

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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Quiz 20: Aggregate Demand and Aggregate Supply