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Econ 8

other things equal, an improvement in productivity will:
shift the aggregate supply curve to the right
a rightward shift in the aggregate supply curve is best explained by an increase in:
productivity
the determinants of aggregate demand:
explain shifts in the aggregate demand curve.
which one of the following would increase per unit production cost and therefore shift the aggregate supply curve to the left?
an increase in the price of imported resources
(Advanced Analysis) Suppose that the equation for aggregate supply in an economy is P=125+0(Q), where P is the price level and Q is real GDP. Also, suppose that the MPC is 0.9 and the initial level of real GDP is $400 billion. After an increase in investment of $20 billion, real GDP and the price level will be:
$600 billion and 125
The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will:
increase U.S. imports and decrease U.S. exports.
An increase in business excise taxes will shift the aggregate supply curve leftward.
True
Other things equal, an outward shift of the production possibilities curve can be expected to:
shift the aggregate supply curve rightward.
Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate:
supply curve will shift rightward.
The fear of unwanted price wars may explain why many firms are reluctant to
reduce prices when a decline in aggregate demand occurs.
When aggregate demand declines, some firms may reduce employment rather than wages because wage reductions may:
not be possible due to the minimum wage law.
All else equal, an increase in imports will shift the aggregate expenditures curve:
downward and the aggregate demand curve leftward.
Other things equal, an improvement in productivity will:
shift the aggregate supply curve to the right
Suppose the price level increases, but real output is unchanged. We can infer that
aggregate demand has increased in the vertical range of the aggregate supply curve
Which one of the following would not shift the aggregate demand curve?
a change in the price level
The equilibrium price level and level of real output occur where:
the aggregate demand and supply curves intersect.
A decrease in per unit production costs will shift the aggregate supply curve leftward.
False
In deriving the aggregate demand curve from the aggregate expenditures model we note that:
an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward).
The aggregate demand curve is:
downsloping because of the interest-rate, real-balances, and foreign purchases effects.
If aggregate demand increases and, as a result, real output and employment increase but the price level remains unchanged, we can assume that:
aggregate demand intersects aggregate supply in the horizontal range of the aggregate supply curve

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