Exam (elaborations)
Test Bank for Macroeconomics Chapter 10 (11th Edition by N. Gregory Mankiw)
- Course
- Institution
Test Bank for Macroeconomics Chapter 10 (11th Edition by N. Gregory Mankiw)
[Show more]
Content preview
Test Bank for Macroeconomics Chapter10 (11th Edition by N. Gregory Mankiw)
Aggregate Demand Curve (AD) - ANSThe curve that shows the level of real GDP purchased by
consumers, businesses, government and foreigners (net exports) at different possible price
levels during a time period, Ceteris Paribus
Why does the Aggregate Demand Curve slope downward to the right? - ANSReal Balances
Effect, Interest Rate effect and Net Export effect
Real Balances Effect - ANSConsumer spend more on goods and services because lower prices
make their dollars more valuable.
Interest Rate Effect - ANSAn increase in the price level increases borrowing demand and in turn
higher interest rates, which discourages consumer spending.
Net Export Effect - ANSExports (X) decrease and imports (M) increase, which decreases real
GDP through the Net Exports component (X-M).
what can cause shift in the Aggregate Demand Curve? - ANSConsumption (C)
Investments (I)
Government Spending (G)
Net Exports (X-M)
Aggregate Supply Curve (AS) - ANSThe curve that shows the level of real GDP produced at
different price levels during a time period, Ceteris Paribus
Why is the Keynesian Aggregate Supply curve horizontal? - ANSBecause product prices and
wages are fixed or rigid.
3 Ranges og Aggregate Supply Curve - ANSKeynesian Range, Intermediate Range and Classic
Range
How is Macro Equilibrium determined? - ANSEquilibrium occurs where the Aggregate Demand
Curve equals the Aggregate Supply Curve.
What is the effect of an increase in AD in the Keynesian Range of AS? - ANSReal GDP
increases while the price level remains constant.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AllLegitExams. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now