What does the vertical axis represent on the aggregate demand curve?

• Total Input
• Total Output
• Price Level
• Both A&B

Which of the following is not a determinant of aggregate demand ?

• Change in Consumer Spending
• Change in Political Parties
• Change in Government Spending
• Change in investment Spending

The foreign purchases effect suggests that a decrease in Canada's price level relative to other countries will: 

• shift the aggregate demand curve leftward.
• shift the aggregate supply curve leftward.
• decrease Canada's exports and increase Canada's imports.
• increase Canada's exports and decrease Canada's imports.

The aggregate supply curve (short-run) slopes upward and to the right because: 

• changes in wages and other resource prices completely offset changes in the price level.
• the price level is flexible upward but inflexible downward.
• supply creates its own demand.
• wages and other resource prices adjust only slowly to changes in the price level.

Refer to the above diagram. If the initial aggregate demand and supply curves are AD₀ and AS₀, the equilibrium price level and level of real domestic output will be: 

• F and C, respectively.
• G and B, respectively.
• F and A, respectively.
• E and B, respectively.

The intersection of the aggregate demand and aggregate supply curve occurs at the economy’s equilibrium level of

• Nominal investment and the interest rate       
• Government taxes and employment
• Real disposable income and unemployment     
• Real domestic output and the price level

If exports from the United States increased, what would most likely happen to real gross domestic product and price level?
Real GDP / Price Level

• decrease/decrease
• increase/increase
• decrease/increase
• increase/no chanve

A major advantage of automatic stabilizers in fiscal policy is that they

• reduce private debt
• go into effect w/o passage of new legislation
• they require a balanced budget
• keep unemployment at zero percent

If, at full employment, the government wants to increase its spending by $200 billion without increasing inflation in the short run, it must do which of the following?

• raise taxes by more than $200 billion
• raise taxes by less than $200
• lower taxes by $200 billion
• decrease the budget deficit

According to Keynesian analysis, if government expenditures and taxes are increased by the same amount, which of the following will occur?

• AS will decrease
• AS will increase
• AD will increase
• unemployment will increase