48.Keynesian economists believe that in the short run, changes in aggregate demand can lead to fluctuations in:  A. Long-run economic growth  B. Potential output  C. Inflation only  D. Unemployment and output levels

How do shifts in aggregate demand and aggregate supply affect the economy's output and price level in the short run and the long run?

Keynesian economic models emphasize the role of:Question 12Answera.Aggregate demand (AD) and government interventionb.Supply and demand in free marketsc.Long-term economic growthd.Savings and investments

The economy is initially at its long-run equilibrium. A diplomatic dispute with its trading partner countries now leads to a decline in its exports. In the short run, the aggregate demand curve shifts left. In the long run, the price level decreases, the output returns to its potential, and real wages decrease. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages do not change. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages increase. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages decrease. In the short run, the aggregate demand curve shifts left. In the long run, the price level decreases, the output returns to its potential, and real wages do not change.

According to the AD-AS (Aggregate Demand-Aggregate Supply) Model, which of the following statements is true?A.A) An increase in government spending will always result in higher inflation and output in the short run.B.A shift to the left of the short-run aggregate supply curve will lead to higher long-run economic growth.C.An increase in aggregate demand will only affect the price level in the long run, not in the short run.D.A decrease in the money supply will shift the aggregate demand curve to the right.

A decrease in aggregate demand will:Question 7Answera.cause inflation.b.decrease unemployment.c.cause the short-run Phillips curve to shift to the right.d.move the economy to a lower point on the short-run Phillips curve.