Macro Ch 3 quiz prep - Chapter 3 Quiz Review PDF

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Chapter 3 Quiz Review...

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Economics Macro Ch 3. Quiz Prep Q: In the short run, wages and some prices are considered to be: A: sticky. Q: A decrease in energy prices will: A: increase short-run aggregate supply. Q: The long run in macroeconomic analysis is a period: A: in which prices and nominal wages are flexible. Q: Producing a short-run level of aggregate output that exceeds the economy's potential output results in a(n) _____ adjustment in _____. A: upward; nominal wages Q: A natural disaster that destroys part of a country's infrastructure is a type of negative _____ shock and therefore shifts the _____ curve to the _____. A: supply; short-run aggregate supply; left Q: Suppose the equilibrium aggregate price level and the equilibrium level of real GDP are both rising. This is probably the effect of a(n) _____ in aggregate _____. A: increase; demand Q: The intersection of an economy's aggregate demand and long-run aggregate supply curves: A: occurs at the economy's potential output in long-run equilibrium. Q: When the economy is producing output above the potential, it has: A: an inflationary gap Q: A negative demand shock can cause: A: a recessionary gap. Q: The aggregate demand curve slopes: A: downward in part because as the price level falls, the ability of households and firms to borrow cheaply increases....