Which of the following factors would NOT cause a shift in the aggregate demand curve? a) Changes in consumer confidence b) Changes in government spending c) Changes in the price level d) Changes in foreign exchange rates

To shift the long-run aggregate supply to the right, which of following are required?   More government controls to ensure real economic growth. Emphasis on more government investment spending. Emphasis on private property rights and individual liberties. Open borders to allow more workers to freely enter the U.S. All of the answers are correct.

According to economists, the process of optimal decision making by consumers typically yields total benefits well above the amount paid for the goods. These market-created benefits are referred to as ▼, and using the graph to the right, are represented by area Suppose now that the market price falls. According to the graph, the excess of total benefits over the total amount spent by consumers will ▼ decrease increase not change PM B Quantity (Q) Q

Consider a world with two countries, the US and Japan. Assuming the standard Keynesian assumptions, please answer the following questions: a) Assuming flexible exchange rates, suppose the US experiences a positive shock to their consumption function so that the entire consumption function for the US shifts upward. Give and explain two reasons why the consumption function would react in this way. b) Draw three diagrams (all pertaining to the US): on the top left, draw the Keynesian cross diagram, on the bottom left, draw an IS - LM diagram, and on bottom right, draw the FX market. Locate the initial point as point A and then show how each diagram is affected by the shock and label as point B, again, assuming flexible exchange rates. Now assume that the US and Japan are in a fixed exchange rate regime. Show how things change and label the new equilibrium, assuming fixed exchange rates as point C (Note: use the same diagrams - i.e., each diagram should have points A, B, and C). c) Explain…

Which of the following would cause a shift in the short run aggregate supply curve? A decrease in interest rates. An increase in price aof key resources like oil. An adjustment in wages or prices by firms An increase in the value of the dollar. A decrease in the price level of the economy. A decrease in the price of key resources like oil. An increase in fechnological innovation.

3. Why the aggregate demand curve slopes downward The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. 170 180 150 B 140 130 A 120 110 AD 100 90 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) PRICE LEVEL

Using the Equation of Exchange, argue how increasing government spending can help the economy/aggregate demand.

When incomes rise, imports tend to a) behave in an unpredictable manner b) fall c) rise d) stay the same

Which of the following would properly be classified as an unfavorable supply shock?   a)The interest rate decreases, spurring investment spending.   b)The government introduces a set of market reforms that strengthens property rights and makes it easier and safer for buyers and sellers to write contracts.   c)The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services.   d)There is a technological improvement that allows firms to reduce their costs of production permanently.   e)There is an increase in government spending.

What would be the impact of an appreciating currency on aggregate demand? a) Decrease b) Increase