ScienceEconomicsMacroeconomics AD-AS Unit 3
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Macroeconomics AD-AS Unit 3

Helen Coleman avatar Helen Coleman
19 February 2024
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30 test answers

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question
The real-balances effect on aggregate demand suggests that a:
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Lower price level will increase the real value of many financial assets and therefore cause an increase in spending
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A decrease in government spending will cause a(n):
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Decrease in aggregate demand
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An increase in productivity will:
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Increase aggregate supply
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An increase in personal income tax rates will cause a(n):
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Decrease (or shift left) in aggregate demand
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An expected increase in the prices of consumer goods in the near future will:
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Increase (or shift right) in aggregate demand now
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An increase in net exports will shift the:
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aggregate demand curve upward and rightward.
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Graphically, cost-push inflation is shown as a:
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leftward shift of the AS curve.
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A decrease in expected returns on investment will most likely shift the AD curve to the:
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Left because investment will decrease
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Graphically, demand-pull inflation is shown as a:
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rightward shift of the AD curve.
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An increase in expected future income will:
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Increase aggregate demand
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Wage contracts, efficiency wages, and the minimum wage are explanations for why:
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Wages tend to be inflexible downward
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The foreign purchases, interest rate, and real-balances effects explain why the:
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Aggregate demand curve is downward-sloping
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A decrease in aggregate demand in the short run will reduce:
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Both real output and the price level
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Prices and wages tend to be:
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flexible upward, but inflexible downward.
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An increase in productivity will:
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Increase aggregate supply
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An expected increase in the prices of consumer goods in the near future will:
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Increase (or shift right) aggregate demand now
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A decrease in aggregate demand in the short run will reduce:
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Both real output and the price level
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An increase in business taxes will result in
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A left shift (decrease) in Aggregate Supply
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A fall in labor costs will cause aggregate:
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Supply to increase or shift right.
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If Congress passed new laws significantly increasing the regulation of business, this action would tend to:
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Increase per-unit production costs and shift the aggregate supply curve to the left
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The real-balances effect on aggregate demand suggests that a:
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Lower price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending
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A decrease in government spending will cause a(n):
answer
Decrease in aggregate demand
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An increase in productivity will:
answer
Increase aggregate supply
question
An increase in personal income tax rates will cause a(n):
answer
Decrease (or shift left) in aggregate demand
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An expected increase in the prices of consumer goods in the near future will:
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Increase (or shift right) in aggregate demand now
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An increase in net exports will shift the:
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AD to the right. (increase)
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Graphically, cost-push inflation is shown as a:
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leftward shift of the AS curve.
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A decrease in aggregate demand in the short run will reduce:
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Both real output and the price level
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An increase in disposable income will shift the
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aggregate demand curve to the right (increase)
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A sharp increase in wages will cause the
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AS curve to shift to the left (decrease)