Economics sample questions - CHAPTER 10 WORKING WITH OUR...

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C HAPTER 10 W ORKING WITH O UR B ASIC A GGREGATE D EMAND AND A GGREGATE S UPPLY M ODEL 1. Which of the following would be most likely to cause an increase in current aggregate demand in the United States? a. increased fear that the U.S. economy was going into a recession b. an increase in the real interest rate c. sharp increase in the value of stocks owned by Americans d. a recession in Canada, Mexico, and Western Europe 2. Which of the following will most likely accompany an unanticipated increase in aggregate demand? 3. In the aggregate demand/aggregate supply model, when the output of an economy is less than its long-run potential, the economy will experience 4. Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas? 5. Which of the following will most likely increase aggregate supply in the long run? a. unfavorable weather conditions in agricultural areas b. an increase in the expected inflation rate c. higher real interest rates d. an increase in the rate of capital formation 6. Within the AD/AS model, an unanticipated increase in short-run aggregate supply will cause real output to
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7. An increase in the long-run aggregate supply curve indicates that
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