A decrease in government purchases of $300 billion will shift the aggregate demand curve to the left by

Competitive markets must exhibit which of the following features:

The federal budget deficit acts as an automatic stabilizer because

How might a U.S. federal budget surplus affect the trade balance? (Assume exchange rates are stated in terms of foreign currency per U.S. dollar.)

Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2024 and in 2025 if the Federal Reserve does not use monetary policy. If the Fed wants to keep real GDP at its potential level in 2025, should it use expansionary or contractionary policy, and what should it do to the federal funds rate?

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?

Using aggregate demand and aggregate supply, explain what happens in the short run if the Federal Reserve raises interest rates in the economy. Be sure to detail what happens to aggregate demand, the price level, the level of GDP, and unemployment. Assume that the economy is at full employment before the interest rate increase.

In the figure above, AD1, LRAS1 and SRAS1 denote AD, LRAS and SRAS in year 1, while AD2, LRAS2 and SRAS2 denote AD, LRAS and SRAS in year 2. Given the economy is at point A in year 1, what will happen to the unemployment rate in year 2?  

Liquidity is defined as

If demand is elastic, total revenue is expected to increase following a price increase.