Aggregate Demand
What is AD = C + I + G + Xn?
This is the formula for aggregate demand.
What does SRAS stand for?
Short Run Aggregate Supply
What does LRAS stand for?
Long Run Aggregate Supply
What city does she live in?
Vaughan
What is autonomous expenditure?
This is the term for spending that happens regardless of income, like food, shelter, and clothing.
Which value is fixed or doesn't change?
Input Prices (IP)
What demand curve from class does the LRAS graph look like?
Perfectly Inelastic
How many years has she been a teacher?
What is 5?
If MPC = 0.8, this is the value of the spending multiplier.
What is the firm's short run profit if the price of apples goes from $10 to $5 and apple pie is sold for $10?
0
Name the phase that is the opposite of LRAS (if LRAS is vertical, this phase is horizontal)
Recessionary Phase
What country is she from?
Italy
What are the real wealth effect, the interest rate effect, and the exchange rate effect?
These are the three reasons the AD curve slopes downward.
What happens to unemployment rate as the SRAS values increase?
UR decreases, more workers are employed
Describe one determinant that shifts the LRAS line left and right
Resources (Land, Labour, Capita), Technological Advancements, Efficiency, etc.
How many children does she have and how old are they?
Two sons, both 18 years old
What is $800?
A $200 increase in government spending occurs when MPC = 0.75. This is the total change in aggregate demand.
What does inflation do to short run input prices?
Nothing
What is the unemployment rate on the LRAS graph?
0 or none
Name one expensive brand she likes
Too many to list