Fill in the blanks to make the following statements correct. a. In the simple macro model of
Question:
Fill in the blanks to make the following statements correct.
a. In the simple macro model of the previous two chapters, the price level was _______ to the model. In the macro model of this chapter, the price level is _______ to the model.
b. A change in the price level shifts the \(A E\) curve because the price level change affects desired ________ and desired _________
c. A rise in the price level causes \(a(n) \_\) _________in households' wealth, which leads to \(\mathrm{a}(\mathrm{n}) \_\) _________in desired consumption, which causes the \(A E\) curve to shift _______ . A fall in the price level causes a(n) ________ in households' wealth, which leads to a(n) __________ in desired consumption, which causes the \(A E\) curve to shift __________
d. A rise in the domestic price level causes net exports to ________ , which causes the \(A E\) curve to shift _. A fall in the domestic price level causes net exports to ________ \(\longrightarrow\), which causes the \(A E\) curve to shift _________
e. Equilibrium GDP is determined by the position of the \(A E\) function for each given price level. An equilibrium point for a particular price level corresponds to one point on the _______ curve.
f. A rise in the price level causes a downward shift of the the curve __________ and a movement upward along the _______ curve.
g. An increase in autonomous expenditure, with no change in the price level, causes the \(A E\) curve to ________ and causes the \(A D\) curve to _____________
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