Question 1

During the latter part of the 1990s, firms purchased new computer systems so that they could establish web sites and eventually online ordering systems. How is this likely to impact the aggregate demand curve and the loanable funds market?

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The answer of During the latter part of the 1990s,...

Question 2

A greater percentage of graduating seniors at all levels) are able to find a satisfactory job within two months of graduation. How is this likely to impact equilibrium output and the price level in the short run?

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The answer of A greater percentage of graduating seniors at...

Question 3

Suppose that the dictator of a small country decides that all prices both inputs and outputs) must be fixed by contract each year and then renegotiated at the end of each year. What does this imply about short-run aggregate supply SRAS)?

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Question 4

New drilling technologies lead to a 50 percent increase in oil reserves. How will this impact equilibrium output and the price level?

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Question 5

If there is a shift in the long-run aggregate supply LRAS) curve, does the short-run aggregate supply SRAS) curve also shift? What if the SRAS curve shifts? Does this cause a shift in LRAS?

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Question 6

What happens to investment spending when the price level rises? Explain and illustrate using a loanable funds market graph.

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Question 7

What happens to net export spending when the price level rises? Explain.

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Question 8

During the latter part of the 1990s, firms purchased new computer systems so that they could establish web sites and eventually online ordering systems. How is this likely to impact the short-run and
long-run aggregate supply?

Accepted Answer

The answer of During the latter part of the 1990s,...

Question 9

Suppose that after living through the great recession of 2007-2009, people decide to save a greater percentage of their incomes. How does this impact the loanable funds market and the aggregate demand curve?

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Question 10

During the early 2000s, housing prices increased by record amounts in many parts of the United States. What was the likely impact on the aggregate demand curve?

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Question 11

The table identifies annual gross domestic product (GDP)( in billions of dollars) for country X.

$$\begin{array} { l l l l } 
\hline \text { Year } & \text { GDP } & \text { Year } & \text { GDP } \
\hline 2006 & 1,107 & 2011 & 2,614 \
2007 & 1,397 & 2012 & 2,460 \
2008 & 1,695 & 2013 & 2,465 \
2009 & 1,667 & 2014 & 2,417 \
2010 & 2,208 & 2015 & 1,774 \
\hline
\end{array}$$

Based on the table, during which years) was the country in a recession?

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The answer of The table identifies annual gross domestic product...

Question 12

Why would a change in the price level lead to a change in interest rates?

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Question 13

What happens to consumption spending when the price level rises? Explain.

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Question 14

Consider shifts in aggregate demand that push the level of real GDP GDP) away from the level of potential output. Explain why, in the long run, RGDP will always return to potential output.

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Question 15

An increase in the minimum wage leads to an increase in the unemployment rate for unskilled workers. How is this likely to impact equilibrium output and the price level in the short run?

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Quiz 13: The Aggregate Demandaggregate Supply Model