ECON 1115 Lecture Notes - Lecture 18: Exchange Rate, Aggregate Demand, Aggregate Supply
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13 Jul 2015
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Econ 1115: principles of macroeconomics- lecture 18: macroeconomics relationships. The model of aggregate demand and aggregate supply: Model of aggregate demand and aggregate supply: the model that most economists use to explain short-run fluctuations in economic activity around its long-run trend. Aggregate-demand curve: a curve that shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level. Aggregate-supply curve: a curve that shows the quantity of goods and services that firms choose to produce and sell at each price level. Economy"s gdp (which we denote as y) is the sum of its consumption (c), investment (i), government purchases (g), and net exports (nx): y = c + i + g + Each of these four components contributes to the aggregate demand for goods and services. For now, we assume that government spending is fixed by policy.
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Related Questions
26. Consumption (household sector) spending is the largest component of
Aggregate employment | |
Aggregate demand | |
Aggregate supply | |
Aggregate income | |
Aggregate output |
27. The aggregate demand curve slopes down, because of the inverse relationship between the price level and real output (GDP).
True | |
False |
28. What happens to the aggregate supply curve when the government imposes an excise tax on production?
Increases by more than the tax | |
Remains the same | |
Shifts to the right | |
reaches a neutral point | |
Shifts to the left |
29. Suppose National Bank has required reserves of $1,000 and actual reserves of $5,000. National Bank' s lending ability is___________.
$6,000 | |
$1,000 | |
$2,000 | |
$5,000 | |
$4,000 |
30. A decrease in the per-unit cost will shift the aggregate supply curve
Middle ward | |
Leftward | |
Will not shift the curve | |
Downward to the right | |
Rightward |