investment and consumption spending. The long-run aggregate supply curve will shift to the right if the economy When banks gain ________, they can ________ their loans; and the money supply ________. Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run? The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off

The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off

imports; exports; net exports Which of the following will shift the aggregate demand curve to the left, ceteris paribus? The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off When the price level in the United States falls relative to the price level of other countries, ________ will fall, ________ will rise, and ________ will rise. ________ of unemployment during ________ make it easier for workers to ________ wages.

When the price level in the United States falls relative to the price level of other countries, ________ will fall, ________ will rise, and ________ will rise.

move the economy up along a stationary aggregate demand curve. An increase in the price level will An increase in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run? In 2005, Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices. Three years later, once the refining capacity was restored, these prices came back down. The restoration of refining capacity should The long run aggregate supply curve

An increase in the price level will

This will shift the aggregate demand curve to the left. If you liquidate $3,000 of your money market mutual fund and transfer the funds to your checking account, then initially, M1 will ________ and M2 will ________. The recession of 2007−2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve? Money's most narrow definition is based on its function as a There has been a decrease in investment. As a result, real GDP will ________ in the short run, and ________ in the long run.

The recession of 2007−2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?

an increase in net exports Which of the following will shift the aggregate demand curve to the right, ceteris paribus? The level of long−run aggregate supply is affected by all of the following except Commodity money The most liquid measure of money supply is

Which of the following will shift the aggregate demand curve to the right, ceteris paribus?

shift the aggregate demand curve to the left. If a person withdraws $500 from his/her checking account and holds it as currency, then M1 will ________ and M2 will ________. In the United States, currency includes Ceteris paribus, a decrease in the price level would be represented by a movement from Suppose the U.S. GDP growth rate is faster relative to other countries' GDP growth rates. U.S. imports will therefore increase faster than U.S. exports, and this will

Suppose the U.S. GDP growth rate is faster relative to other countries' GDP growth rates. U.S. imports will therefore increase faster than U.S. exports, and this will

They increase disposable income, consumption, and aggregate demand. Refer to the figure. An increase in taxes would be depicted as a movement from _______, using the basic AD-AS model in the figure. The invention of the cotton gin ushered in the Industrial Revolution and began a long period of technological innovation. What did this technological change do the short run supply curve? Refer to the figure to the right. Ceteris paribus, a decrease in government spending would be represented by a movement from How do lower taxes affect aggregate demand?

How do lower taxes affect aggregate demand?

AD2 to AD1. Ceteris paribus, a decrease in interest rates would be represented by a movement from In an attempt to bring lenders and borrowers together following the financial crisis of 2008, the Federal Reserve made a large amount of new funds available to financial markets. The Fed expected this to increase the money supply and the total amount of lending because of the multiplier effect, in which a given amount of new reserves results in a multiple increase in Which of the following best describes how banks create money? Refer to the figure to the right. Ceteris paribus, a decrease in government spending would be represented by a movement from

Refer to the figure to the right. Ceteris paribus, a decrease in government spending would be represented by a movement from

point A to point B. Which of the following is not counted in M1? Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium? Ceteris paribus, a decrease in the price level would be represented by a movement from An increase in government purchases will increase aggregate demand because

Ceteris paribus, a decrease in the price level would be represented by a movement from

AD1 to AD2. The more excess reserves banks choose to keep Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%. Refer to the scenario above. As a result of Kristy's deposit, Bank A's reserves immediately increase by The level of long−run aggregate supply is affected by all of the following except Ceteris paribus, a decrease in interest rates would be represented by a movement from

Ceteris paribus, a decrease in interest rates would be represented by a movement from

What are some benefits of exports for a country's economy? Increase unemployment, reduce GDP, cause inflation Cause trade deficits, increase national debt, reduce exports Decrease foreign investment, increase tariffs, reduce trade Bring revenue, easy to produce, can attract DFI

Bring revenue, easy to produce, can attract DFI

What are some problems associated with exports in the long run? Increased pollution, loss of cultural identity, reduced innovation Short run fuel fluctuations, long run price decline, long run exhaustion of some commodities Increase in domestic prices, decrease in foreign demand, loss of market share Higher tariffs, increased competition, reduced quality of goods

Short run fuel fluctuations, long run price decline, long run exhaustion of some commodities

What is a cartel and how does it boost revenue for its members? A group of producer companies who make a formal written agreement to cooperate and raise the commodity price An international organization that promotes free trade among member countries A government agency that regulates prices to ensure fair competition A non-profit group that advocates for consumer rights and fair pricing

A group of producer companies who make a formal written agreement to cooperate and raise the commodity price

What are the conditions necessary for a cartel to be successful? High consumer demand and low production costs Cooperation among most of the major producers Strong legal enforcement and international support Government subsidies and tax incentives

Cooperation among most of the major producers

What factors can lead to the breakdown of cartels? Strong government regulation and oversight High consumer loyalty and brand recognition Stable market conditions and predictable demand Cheating members and new members outside the cartel

Cheating members and new members outside the cartel

Why might OPEC regain power in the global oil market? OPEC has formed alliances with renewable energy companies OPEC has diversified its energy sources and reduced reliance on oil OPEC has increased its investment in technology and innovation Most oil prices will run out soon therefore oil prices will be high = OPEC powerful demand keeps growing

Most oil prices will run out soon therefore oil prices will be high = OPEC powerful demand keeps growing

Why do some optimists believe OPEC won't regain power? Optimists say there is time to be more energy-independent, making own energy OPEC's member countries are experiencing political instability OPEC's influence has been diminished by international sanctions OPEC has lost significant market share to renewable energy sources

Optimists say there is time to be more energy-independent, making own energy

What are the benefits of migration for individuals and their families? Loss of cultural identity, increased discrimination, lower wages Increased cultural isolation, reduced job opportunities, lower quality of life Higher taxes, increased cost of living, reduced access to education Higher income, more job satisfaction, better future jobs, higher quality of life, also for children

Higher income, more job satisfaction, better future jobs, higher quality of life, also for children

What are some potential costs of migration for individuals? Greater cultural integration, stronger community ties, increased political influence Access to better healthcare, improved education, enhanced social status Increased job opportunities, higher wages, better living conditions Psychological costs - culture shock, separation shock, xenophobia from natives, visa issues

Psychological costs - culture shock, separation shock, xenophobia from natives, visa issues

What are the driving forces that influence total migration? Technological, historical, geographical, linguistic, religious Military, educational, recreational, artistic, philosophical Medical, agricultural, industrial, financial, legal Economic, political, demographic, environmental, sociocultural

Economic, political, demographic, environmental, sociocultural

What forms of income flow from the business sector to households? Loans and grants Interest and dividends Wages, salaries, rents, and profits Taxes and subsidies

Wages, salaries, rents, and profits

How does money return to the business sector from households? Through government taxes Through the purchase of goods and services Through savings and investments Through foreign trade

Through the purchase of goods and services

How is GDP measured in the circular flow diagram? By the level of government spending By the flow of money in the economy By the amount of goods produced By the total number of transactions

By the flow of money in the economy

What are some reasons for changes in GDP levels? Changes in consumer spending, investment, and government policy Fluctuations in weather patterns Variations in population growth Shifts in cultural trends

Changes in consumer spending, investment, and government policy

What happens when households increase their savings? They increase their consumption They boost government revenue They enhance foreign trade They reduce spending on goods and services

They reduce spending on goods and services

What is the effect of businesses forwarding less money to households? It enhances foreign investments It increases household savings It boosts consumer confidence It decreases the flow of money and the level of GDP

It decreases the flow of money and the level of GDP

How does government spending affect the circular flow of money? It causes inflation It stabilizes the economy It puts money back into the economy It removes money from the economy

It puts money back into the economy

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