A) the exchange rate will increase, causing U.S. goods to become cheaper and increasing total planned real expenditures.
B) imports increase but exports do not change. Therefore, there is no effect on total planned real expenditures.
C) foreign residents buy fewer U.S. goods, leaving more goods for U.S. residents and an increase in total planned real production by firms.
D) domestic goods are more expensive relative to foreign goods, which reduces total planed real expenditures.
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A) is vertical at the full-employment level of output.
B) is horizontal at the full-employment level of output.
C) is downward sloping.
D) is upward sloping.
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A) the substitution effect.
B) the wealth effect.
C) the indirect effect.
D) the interest rate effect.
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A) interest rate effect.
B) real-balance effect.
C) open economy effect.
D) aggregate balances effect.
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Higher price levels indirectly increase ...View Answer
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A) the aggregate supply curve.
B) the aggregate demand curve.
C) the price level curve.
D) the employment curve.
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A) is the total amount of raw materials available in an economy.
B) is the overall wealth within an economy.
C) is the total amount of money circulating in an economy.
D) is the total of all planned production in an economy.
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A) only when both aggregate demand and aggregate supply increase.
B) when aggregate supply increases.
C) when aggregate demand decreases.
D) only if the price level is constant or rising.
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A) a sustained decrease in aggregate demand.
B) a sustained increase in aggregate demand accompanied by an even larger decrease in LRAS.
C) a sustained decrease in aggregate supply.
D) a sustained increase in aggregate supply accompanied by an even larger increase in aggregate demand.
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A) a drop in the price level.
B) tax increases.
C) an increase in the U.S. real interest rate.
D) a decrease in the amount of money in circulation.
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A) the real-balance effect.
B) the interest rate effect.
C) the open economy effect.
D) the price level effect.
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A) the horizontal summation of all demand curves for a product.
B) the sum of all planned expenditures for the economy.
C) the total quantity of all goods sold in an economy in a year.
D) the horizontal summation of all demand curves for state, local, and federal governments and business firms.
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A) changes in the stock of real wealth held by individuals.
B) the effect of changing interest rates on the quantity demanded of interest-rate-sensitive goods.
C) the availability of foreign substitute goods.
D) the presence of unused production capacity and unemployment.
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A) Total planned real spending remains constant.
B) Total planned real spending increases.
C) Total planned real spending also falls.
D) Planned real spending on goods increases but planned real spending on services falls.
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A) total planned production exceeds total expenditures.
B) total expenditures exceed total planned expenditures.
C) total planned production equals total expenditures.
D) total planned production is less than total expenditures.
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A) a decrease in aggregate supply and no change in aggregate demand.
B) a decrease in aggregate demand and no change in aggregate supply.
C) an increase in aggregate supply and no change in aggregate demand.
D) an increase in aggregate demand and no change in aggregate supply.
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A) shift of the aggregate demand curve to the right.
B) shift of the aggregate demand curve to the left.
C) movement up along the aggregate demand curve.
D) movement down along the aggregate demand curve.
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A country can experience economic growth...View Answer
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A) aggregate expenditures.
B) aggregate demand.
C) aggregate supply.
D) aggregate inflation.
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A) the full-information level of output.
B) the full-employment level of output.
C) the full-adjustment level of output.
D) all of the above.
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