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The aggregate demand curve shows the:
Inverse relationship between the price level and real GDP purchased
The labels for the axes of the aggregate demand graph should be:
Real domestic output on the horizontal axis and the price level on the vertical axis
Which of the following effects best explains the downward slope of the aggregate demand curve?
An interest-rate effect
The following factors explain the downward slope of the aggregate demand curve, except:
A substitution effect
The foreign purchases, interest rate, and real-balances effects explain why the:
Aggregate demand curve is downward-sloping
A decrease in expected returns on investment will most likely shift the AD curve to the:
Left because Ig will decrease
In the Great Recession of 2007-2009, the stock market values shrank, causing a reverse:
Which of the following events would most likely reduce aggregate demand?
An increase in real interest rates
If the dollar appreciates in value relative to foreign currencies:
Aggregate demand decreases because net exports decrease
When national income in other nations decreases, aggregate demand in our economy:
Decreases because our exports will decrease
An aggregate supply curve represents the relationship between the:
Price level and the production of real domestic output
The labels for the axes of an aggregate supply curve should be:
Real domestic output for the horizontal axis and price level for the vertical axis
The short-run aggregate supply curve shows the:
Direct relationship between the price level and real GDP produced
If the price of crude oil decreases, then this event would most likely:
Increase aggregate supply in the U.S.
If Congress passed new laws significantly increasing the regulation of business, this action would tend to:
Increase per-unit production costs and shift the aggregate supply curve to the left
The intersection of the aggregate demand and aggregate supply curves determines the:
Equilibrium level of real domestic output and prices
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