AP Macro 3.1 - 3.7 Review

Front

When taxes decrease, consumption

Back

increases, so aggregate demand shifts right

Front

When the government spends more, the initial effect is that

Back

aggregate demand shifts right

Front

Aggregate demand shifts left when the government

Back

Cuts military expenditures

Front

If countries that imported from the US went into a recession, U.S. net exports would

Back

fall, making aggregate demand shift left

Front

All of the following can shift aggregate supply, except: Supply shocks from trading partners, Increased business taxes, Changes in the price level, an innovation in technology

Back

Changes in the price level

Front

What is represented on the "X" axis on the AD/AS Model? Options: price level, price, Real GDP, Nominial GDP

Back

Real GDP

Front

What is on the "Y" axis on an AD/AS Model? Options: Real GDP, output, price level, price

Back

price level

Front

What is the vertical line called on the AD/AS Model? Options: short-run aggregate supply, aggregate demand, long run aggregate supply, r GDP

Back

long run aggregate supply

Front

What is a recessionary gap?

Back

when output falls below potential

Front

What is an inflationary gap?

Back

when output goes beyond full employment