Chapter 10 Flashcards
Exports have the same macroeconomic effect upon GDP as:
investment
If equilibrium output in an open economy is $1000 billion, and consumption is $700 billion at that level of real output, then:
G + I + (X-M) must equal $300 billion
The aggregate demand curve:
shows the amount of real output that will be purchased at each possible price level
What do the wealth and foreign trade effects have in common? They both help to explain:
why the aggregate demand curve is downward-sloping
The factors that affect the amounts that consumers, businesses, government, and foreigners wish to purchase at each price level are:
aggregate demand factors
Ceteris paribus, the real interest rate and the level of planned investment are:
inversely related
The investment-demand curve will shift to the right as a result of:
a technological change that reduces production costs
An increase in investment spending caused by a decline in the real interest rate will:
shift the aggregate demand curve to the right
If Canada wants to increase its net exports, it might take steps to:
decrease the price of the Canadian dollar in terms of foreign currencies
Ceteris paribus, serious recessions in the economies of our major trading partners will tend to:
depress real output and employment in our economy
Ceteris paribus, if the national incomes of Canada’s major international trading partners were to rise, Canada’s:
aggregate demand curve would shift to the right
Which one of the following would not shift the aggregate demand curve?
a change in the price level
Suppose that real output in an economy is 20 units, the quantity of inputs is 10, and the price of each
input is $4.
The level of productivity is:
2
Suppose that real output in an economy is 20 units, the quantity of inputs is 10, and the price of each
input is $4.
The per-unit cost of production in the economy described above is:
$2.00
