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Questions and Answers
The LRAS curve is depicted as a vertical line, indicating that in the long run, real GDP is determined by factors such as the number of ______, level of technology, and capital stock.
workers
Changes in the ______ force can shift the short-run aggregate supply curve.
labor
A change in the price level and the change in price level is not caused by factors that would otherwise affect ______ aggregate supply, a movement along the SRAS curve.
short-run
The short-run aggregate supply curve describes the relationship between the ______ level and the quantity of goods and services firms are willing to supply, holding constant all other variables.
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Shifts in the ______ Run Aggregate Supply Curve (SRAS) are caused by factors such as changes in the labor force, capital stock, productivity, and supply shocks.
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A change in the ______ of an important natural resource can shift the short-run aggregate supply curve.
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The real interest rate is equal to the nominal interest rate minus the ______ rate.
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Firms have ______ costs: the cost to firms of changing prices.
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The ______ demand curve shows the relationship between the price level and the quantity of real GDP demanded by households, firms, and the government.
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In the short run, the ______ aggregate supply curve shows the relationship between the price level and the quantity of real GDP supplied by firms.
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Unpredictable inflation makes ______ and lending risky.
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Deflation is much more ______ for an economy than inflation.
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If our exchange rate rises, our exports become more expensive, so foreigners buy less of them due to the ______ effect.
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A rise in interest rates will lead to a decrease in ______ spending.
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The aggregate demand curve shows the relationship between the price level and real ______ demanded.
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The ______ effect is caused by a change in the price level, which affects the value of wealth and thus the amount of consumption.
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The ______ aggregate supply curve is affected by the production costs and technology in the short term.
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Monetary policy can influence aggregate demand through the ______ effect, which affects consumption and investment spending.
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