Economics 1022A/B Lecture Notes - Lecture 26: Real Wages, Aggregate Demand, Aggregate Supply

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ECON 1022A/B Full Course Notes

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The quantity of real gdp demanded is the total amount of final goods and services produced in canada that people, businesses, governments, and foreigners plan to buy. Increase in prices decreases real wealth, spending is cut back to save more so real wealth can be restored. Substitute future goods: increase in prices causes interest rate to rise, postponing purchases of cars, houses. Substitute foreign goods: increase in our prices decreases exports and increases imports. T(cid:28667)(cid:28664) (cid:28666)ov(cid:28664)rnm(cid:28664)nt"s (cid:28660)tt(cid:28664)mpt to (cid:28668)n(cid:28665)lu(cid:28664)n(cid:28662)(cid:28664) t(cid:28667)(cid:28664) (cid:28664)(cid:28662)onomy (cid:28661)y setting and changing taxes, making transfer payments, and purchasing goods and services: monetary policy. Interest rates & quantity of money: world economy. As the price level changes the money wage rate also changes so that the real wage rate remains at the full-employment equilibrium level and real gdp remains at potential. Period when real gdp differs from potential gdp. Price-quantity relationship when the wage rate, other resource prices, and potential.

Related Questions

According to the foreign purchases effect, prices in the United States and prices in other countries remain stable, without a corresponding adjustment in exchange rates

A. U.S. consumers will buy more foreign goods and services, and imports will fall foreigners will buy fewer goods and services produced in the United States, and exports will increase. The number of net exports will fall increasing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve.

B. U.S. consumers will buy more foreign goods and services, and imports will rise, foreigners will buy fewer goods and services produced in the United States, and exports will fall. The number of net exports will fall, reducing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve..

C. U.S. consumers will buy fewer foreign goods and services, and Imports will rise foreigners will buy more goods and services produced in the United States, and exports will fall. The number of net exports will rise, reducing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve.

D. U.S. consumers will buy more foreign goods and services, and Imports will fall foreigners will buy fewer goods and services produced in the United States, and exports will rise. The number of net exports will rise, reducing the quantity of real GOP demanded, resulting in a downward sloping aggregate demand curve.

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MACROECONOMICS

1. Which one of the following is not a determinant of aggregate demand?

a. Investment expenditure

b. Technology

c. Consumption expenditure

d. Net exports

2. An improvement in technology will?

a. Decrease aggregate demand

b. Increase aggregate demand

c. Increase aggregate supply

d. Decrease aggregate supply

3. Oil price changes in the mid 80's are an example of?

a. An exiernal supply shock increasing prices and reducing real income

b. An external supply shock decreasing prices and raising real income

c. An external supply shock increasing prices and reducing real in come

d. An external demand shock inceasing prices and reducing real in come

4. The oil shock in 1979-80 was an example of?

a. An external supply shock decreasing prices and increasing real income

b. An external supply shock increasing prices and decreasing real income

c. An external demand shock decreasing prices and real income

d. An external demand shock increasing prices and real income

5. Which one of the following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Wealth effect

c. Changes in real output

d. Changes in interest rate

6.Which one of the following is not determinant of aggregate supply?

a. Productivity

b. Disposal income

c. Capacity and investment plan

d. Cost and availability of resources

7. Which of the following relationship is correct?

a. Equilibrium employment and full employment may not be the same

b. Equilibrium employment and full employment are not related

c. Equilibrium employment and full employment are always the same

d. Equilibrium employment and full employment are never the same

8. Which of the following was not a factor limiting the severity of effects of the oil sopply shock of 1979-80?

a. Increase in use of alternative sources of energy

b. More efficient use of energy

c. Increased supplies of non-OPEC oil

d. More rapid worldwide economic growth

9. Which one of following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Interest rate changes

c. Wealth effect

d. Chnages in real output

10. With aggregate demand shocks?

a. teh aggregte supply curve moves up the aggregate demand curve and increases price and reduces real income

b. the aggregate demand curves moves up the aggregate supply curve and increases prices and real income

c. the aggregate demand curves moves down the aggregate supply curve and increases both prices and real income

d. the aggregate supply curve moves down the aggregate demand curve and reduces prices and increases in real income

2) Which of the following situations illustrates how fiscal policy can influence aggregate demand? A) The Bank of Canada raises interest rates so people plan to buy less consumer durables. As a result, aggregate demand decreases. B) The government increases its expenditures. The demand for loanable funds increases, which raises the real interest rate. Investment increases. The government reduces the goods and services tax. As a result, consumption expenditure increases and aggregate demand increases. D) Investors, anticipating an erosion of financial wealth due to inflation, decide to save more. As a result, aggregate demand decreases. E) The exchange rate value of the Canadian dollar rises. As a result, people living near the U.S.-Canada border increase their imports of goods and net exports decrease.

Economics 1022A/B Lecture Notes - Lecture 26: Real Wages, Aggregate Demand, Aggregate Supply

ECON 1022A/B Full Course Notes

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