Price level B

Explain how real GDP is determined when the price level is fixed.

Which of the below is one of the reasons that the Aggregate Demand curve is downward sloping? The income effect of a price change, aggregated across many markets The substitution effect of a price change, aggregated across many markets Higher inflation means nominal incomes are higher so households can afford to spend more Higher domestic price levels cause exports to fall and imports to rise

AD AD AD, Real GDP Refer to the above diagram. An expansionary fiscal policy can best be represented by a: Multiple Choice shift in the aggregate demand curve from AD2 to AD1. shift in the aggregate demand curve from AD3 to AD2. Prex Price Level

According to Keynes’ Law... A) The total demand for products determine the level of gross domestic product and may not equal the supply capacity of the economy in the short run. B) The total demand always equals the total supply capacity in the short run. C) The total demand tends to rise above the total supply capacity in the short run which leads to recessions D) The total supply of products determines the level of gross domestic product and the level of demand in the economy in the long run.

Which of the following is likely to occur if an increase in legal immigrants significantly reduces the wages of workers, ceteris paribus? A. Aggregate supply will decrease (shift left). B. Aggregate supply will increase (shift right). C. Aggregate demand will increase (shift right). D. Aggregate demand will decrease (shift left).

Which of the following statement is true? A) Economic fluctuations are irregular and unpredictible B) Most macroeconomic quantities fluctuate together C) As output falls, unemployment rises D) All of the above

Price Level AD1 AD₂ AD2 Real Domestic Output, GDP Refer to the accompanying graph. What combination would most likely cause a shift from AD1 to AD2? Multiple Choice О an increase in taxes and no change in government spending О a decrease in taxes and a decrease in government spending О a decrease in taxes and an increase in government spending

Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT a-with deflation people spend less  expecting prices to be lower in the future b- the rising prices makes goods more expensive c- with deflation the value of assets declines while the value of loans does not - this lowers wealth and further depresses spending

Other things the same, continued technological progress and continued increases in the money supply would unambiguously lead to rising prices only. rising real GDP only. rising prices and rising real GDP. neither rising prices nor rising real GDP.