Macro Econ Exam 3

The total of all planed production for the entire economy is known as - Answer- aggregate supply long run aggregate supply reflects - Answer- total production in the economy at full employment when is the long run aggregate supply curve vertical? - Answer- at the full employment level of real GDP What does the long run aggregate supply curve indicate? - Answer- the level of output (GDP) that occurs when resources are fully employed the long run aggregate supply equals - Answer- potential real GDP What is the level of output that occurs when the economy is operating on the production possibilities curve? - Answer- long run aggregate supply What orientation is the long run aggregate supply curve? - Answer- vertical The long run aggregate supply curve of an economy corresponds to - Answer- a point on the production possibilities curve The total of all planned production in an economy - Answer- aggregate supply Why is the long run aggregate supply curve a vertical line? - Answer- At that level of real GDP, resource costs have fully adjusted to price changes Economic growth causes the LRAS to...? - Answer- shift right Aggregate demand reflects what? - Answer- planned total spending in the economy Which way does the aggregate demand curve usually slope? - Answer- downward real balance effect - Answer- the change in the value of cash balances due to price level changes Anot