1. Refer to the figure below. An increase in interest rate would cause: Price level, P AD₂ B AD ADO Aggregate output, Y A) the aggregate demand curve to shift from AD₁ to AD2 B) the economy to move from Point A to Point B C) the aggregate demand curve to shift from AD₁ to ADo D) neither a shift of the aggregate demand curve nor a change in real GD³

1. The basic aggregate demand and aggregate supply curve model help explain A) 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 demanded. shows the relationship between the price level and quantity of real GDP A) consumer price index B) aggregate expenditure line C) 45-degree line D) aggregate demand curve

Refer to the following figure   1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion.   3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…

Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, a shift in neither curve, or shift in both curves.      If a shift is caused, indicate which curve shifts, and in which direction it shifts. What happens to aggregate output and the price level in each case?  4. The wages rate decreases.