A decline in investment spending at each price level will
shift the aggregate demand curve to the left
What are reasons for the up-sloping aggregate supply curve in the short run?
Input costs are fixed, but output costs are variables. And Higher prices mean higher profits when input costs are fixed.
The aggregate demand curve will shift to the right when consumers expect their future incomes to...
An in crease in aggregate demeand assuming constant aggregate supply will result in
demand pull inflation
For any increase in aggregate demand, the resulting increase in real _____ will be small, the greater increase in the price level.
Regulations imposed on firms by the government
increase per-unit production costs and shift the aggregate supply curve to the left
Assuming constant price levels, any initial decrease in aggregate demand results in the ______ being at full strength
What statements best illustrate a decrease in domestic resource prices and associated shift of the Aggregate Supply curve
The supply of available land expands shifting the AS curve rightward. A decrease in the price of steel and electronics components shifts the AS curve rightward. And substantial rise in immigration decreases wages shifting the AS cure rightward.
An unexpected increase or decrease in asset values that results in a change in consumer spending is called the
What summarizes the effect of rising national incomes abroad on US exports
US exports rise, foreigners are encouraged to buy more US products, and US aggregate demand curve shifts to the right
What makes the price level remain stuck at its old level even when aggregate demand declines
When aggregate demand increases, the price level rises. But when aggregate demand decreases, the price level tends to be inflexible. What effect does this describe?
The ratchet effect
Discretionary fiscal policy is designed to do what
Control inflation, encourage economic growth, and achieve full employment.
The Federal Governments way of manipulating taxes and spending to stimulate the economy and rein in inflation is called
Crowded out results from a expansionary fiscal policy are
Interest sensitive consumption and investment
What provides the info needed to assess discretionary policy and determine weather it is expansionary, contractionary, or neutral
Cyclically adjusted deficits
What problems of timing may arise in connection with fiscal policy
Administrative lags, recognition lags, and operational lags.
Built in stability constitutes ______________ or passive or automatic budgetary policy
Economists agree that if the Fed decide to go with neutral fiscal policy then standardized budget and deficit or surplus of no more than 2% of GDP ________ is doing its job.
What are some US securities
Treasury notes, bonds, and bills, also US saving bonds. But not Treasury stocks or US checking bonds.
Discretionary fiscal policy is designed too
encourage economic growth, control inflation, and achieve full employment.
Public borrowing drives up real interest rates and does what to private investment spending
What characterize near-monies
Don not function directly as a medium of exchange, highly liquid, and can be readily converted into check-able deposits.
When people measure the worth of various items in terms of money, money is performing the function of what?
Unit of account
The board of governors with the aid of the Federal __________ ___________ committee make the basic policy decision that provide monetary control of the US money and banking system
In emergency circumstances the Fed. Reserve Banks are the "______ of last resort" to the banking system.
Governments monetary authorities attempt to provide the amount of money needed for the particular volume of business activity that will promote what?
Price level stability, full employment, and economic growth. But no stock market fluctuation or commercial bank growth.
Money markets mutual fund companies use the combined funds of individual _________ to buy interest bearing short term credit instruments such as certificates of deposit and the US government securities
When a deposited check is drawn against another bank, it will _______ the reserves of that other bank
How much ever you deposit into the checking account that will increase 100% of the check able deposits
One way banks can partly reconcile profit and liquidity goals is to
lend temporary excess reserves held at the Federal reserve banks to other commercial banks overnight to earn interest.
The monetary multiplier is similar to the ___________ multiplier available to the government