28.
How do changes in technology cause the Long-Run Aggregate
Supply Curve to increase and decrease?
29.
How do economists utilize AD/AS depict long-run growth and
inflation?
30.
How is Short-Run Aggregate Demand different from Short-run
Aggregate different?
31.
Why is the Short-Run Aggregate Supply Curve upward sloping?
32.
What is the Sticky-Wage theory?
33.
What factors will cause Aggregate Supply Curve to shift to the
left and to the right?
34.
Illustrate an economy operating at full employment. Utilize
Microsoft Paint to illustrate this on the AD/AS graph.
35.
Illustrate an economy operating in a recession. Utilize
Microsoft Paint to illustrate this on the AD/AS graph.
36.
Illustrate an economy operating in an inflationary zone. Utilize
Microsoft Paint to illustrate this on the AD/AS graph.
37.
How do shifts in Aggregate Demand differ from shifts in ShortRun Aggregate Supply?
38.
Show how stagflation can occur utilizing the AD/AS graph.
Utilize Microsoft Paint to illustrate this on the AD/AS graph.
39.
Why do policy makers feel that stagflation is the worst
possible economic scenario?
23.
What is the Crowding-Out Effect?
24.
Why is it important to understand the multiplier effect?
25.
What is the difference between a marginal propensity to
consume, and a marginal propensity to save.
26.
What are the two formulas used to calculate the multiplier
effect?
27.
Calculate the Multiplier for the following amounts:
Marginal
Multiplier
Propensity to Effect
Consume
.1
.2
.25
.5
.75
.8
.9
28.
Why does the multiplier effect react to consumption,
investment, government purchases, and net exports?
29.
When does the government increase the Demand for Money?
30.
What are the negative consequences of the crowding out
effect?
31.
How do tax cuts affect aggregate demand?
32.
Why is it important to know the multiplier effect and crowding
out effect when deciding fiscal policy?
33.
What fiscal policy actions should government take when
battling recession?
34.
What fiscal policy actions should government take when
battling inflation?
35.
How to John M. Keynes influence public policy?
36.
What are some criticisms against stabilizations?
37.
What are automatic stabilizers?
38.
How does the tax system act as an automatic stabilizer?
39.
How does government spending act as an automatic stabilizer?
40.How do automatic stabilizers help stabilize the economy?