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ECON 105 Lecture 5: CHP23

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ceriseshark549
22 Apr 2015
School
Simon Fraser University
Department
Economics
Course
ECON 105
Professor
Stephen Choi

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ECON 105 Full Course Notes
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Document Summary

Chapter 23: output and prices in the short run. Gdp and the price level: the demand side of the economy. The simple sr macro models we have dealt with in previous chapters are built with an assumption of the _________________ price level. this chapter, we need the. _________________ affects ______________________________________. to understand how a change in. The desired ae curve shifts in response to a change in the price level. A: decreases and would consumptions bond issuers, but there is no change in. A rise in the price level a reduction in the _________ value of the private sector"s wealth a decrease in ________________ desired consumption expenditures a ________________ shift in the ae function a. A: canadian goods are more expensive relative to foreign goods. X is decreased and the nx function will shift downward and become steeper, then ae function shifts downward. A rise in the domestic price level domestic goods and services relatively.

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Related Questions

1. According to classical macroeconomic theory, changes in the money supply affect:

a. real GDP and the price level.

b. real GDP but not the price level.

c. the price level, but not real GDP.

d. neither the price level nor real GDP

 

2. Aggregate demand shifts right if:

a. government purchases increase and shifts left if stock prices rise.

b. government purchases increase and shifts left if stock prices fall.

c. government purchases decrease and shifts left if stock prices rise.

d. government purchases decrease and shifts left if stock prices fall.

10,A change in the price level​ ________ the AE curve and​ ________ the AD curve.
A.
​shifts; shifts
B.
has no effect​ on; results in a movement along
C.
results in a movement​ along; results in a movement along
D.
results in a movement​ along; shifts
E.
​shifts; results in a movement along

17,When the price level​ falls, the aggregate planned expenditure curve shifts​ ________, equilibrium expenditure​ ________ and there is a movement​ ________ along the aggregate demand curve.
A.
​upward; increases; upward
B.
​downward; decreases; downward
C.
​upward; decreases; downward
D.
​upward; increases; downward
E.
​downward; increases; upward

21,Which of the following increases the size of the expenditure​ multiplier?
A.
an increase in autonomous spending
B.
a decrease in the marginal propensity to consume
C.
a decrease in the marginal propensity to import
D.
an increase in the marginal income tax rate
E.
an increase in investment

23,If the quantity of real GDP demanded is greater than the quantity of real GDP​ supplied, then
A.
the price level falls and firms decrease production.
B.
aggregate demand changes to restore equilibrium.
C.
the economy must be producing at potential GDP.
D.
the price level falls to restore the macroeconomic equilibrium
E.
the price level rises and firms increase production.


24, ________ can trigger an expansion.
A.
Equality between aggregate expenditure and real GDP
B.
A decrease in induced expenditure
C.
A downward shift of the AE line
D.
An increase in autonomous expenditure
E.
A decrease in autonomous expenditure


1. Discuss the difference between an increase in the aggregate demand curve and an increase in the quantity of real GDP demanded. Include a discussion of how the price level relates to each event.

2. What are the major factors that determine investment, and what impact does each have on aggregate demand?

3. Describe the difference between a microeconomic demand curve and an aggregate demand curve.

4. The aggregate demand curve portrays the relationship between the price level and real GDP. What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

5. What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

6. Shifts in the Aggregate Supply Curves

List and discuss the things that will make the Short Run Aggregate Supply curve shift to the left or to the right. Illustrate.

List and discuss the things that will make the Long Run Aggregate Supply curve shift to the left or to the right. Illustrate.

7. What is the natural level of output?