ECON 211 Quiz #5 Aggregate Supply and Demand

ECON 211 Quiz #5 Aggregate Supply and Demand flashcards in fill in the blank format.

An increase in spending growth will lead to an _________ in aggregate demand and, in the long-run, will lead to an _________ in inflation and _________ in potential GDP grow.

increase, increase, no change

A decrease in spending growth will lead to a _______ in aggregate demand and, in the long-run, will lead to a _______ in inflation and ________ in potential GDP grow.

decrease, decrease, no change

Every economy has a potential growth rate that is determined by the stock of _______ and ________ and productivity.

labor, capital

The Long-Run Aggregate Supply Curve (LRAS) is vertical at the (potential GDP growth rate).

Solow growth rate

An increase in spending growth is most likely caused by an increase in ________.

money growth

A productivity slump/technology slump will drive the inflation rate ________ and the real growth rate ________.

higher, lower

A significant fall in the price of oil will drive the inflation rate ________ and the real growth rate ________.

lower, higher

A time of exceptionally good weather will drive the inflation rate _______ and the real growth rate _________.

lower, higher

A positive shock to spending must increase _________ or the _________.

inflation, real growth rate

In the short-run, an increase in aggregate demand will increase both ________ and _________.

inflation, real growth

In the short-run, a decrease in aggregate demand will decrease both ________ and _________.

inflation, real growth

In the long-run, an increase in aggregate demand will increase _______ and not impact the ________.

inflation, real growth rate

In the long-run, a decrease in aggregate demand will decrease _______ and not impact the __________.

inflation, real growth rate

A significant rise in consumer confidence will cause real GDP growth to _______ in the long-run.

not change

A significant increase in government spending will cause inflation to ________ and real GDP growth to ________ in the short-run.

increase, increase

A significant increase in government spending will cause inflation to ______ and real GDP growth to ________ in the long-run.

increase, remain unchanged

The significant difference between the short-run and the long-run is that prices are _________ in the short-run and _________ in the long-run.

sticky, perfectly flexible

An increase in savings will lead to a _______ in interest rates.

decrease

A significant increase in the U.S. birth rate can be expected lead to _______ inflation and _______ real growth rate in the long-run.

lower, higher