From the list on your right select the letter that contains the word, phrase, name, etc that best matches the word, phrase, name, etc listed on the left. II The AD curve intersects the SRAS curve to the left of the LRAS curve A massive cut in government expenditure LRAS curve Foreign real national income rises, business tax declines, individuals are optimist about their future incomes Sticky wages Island of Puerto Rico 'destroyed' by Hurricane Maria A decline in the overall price level improves the purchasing power of monetary wealth leading to increased spending. AD curve shifts to the left Possible decline in Chinese import from the U.S. The level of Real GDP is fixed at a given amount regardless of the price level A rightward movement along the AD curve to a lower level of real GDP demanded Possible increase in U.S. export to China No matter what the price level is, real wages remain constant. Inflationary gap is observed by Hurricane Maria Duration: 3:07 User: n/a - Added: 9/20/17 Real Wage Real Balance (wealth) effect Table of exchange rates between U.S Dollar ($) and Chinese Yuan Renminbi (v for 2 consecutive years Year 1 $1 6.80 2 | $1 | 6.85 A decline in the price level prompts a decrease in the demand for credit 10. 11, 12, 13. 14. 15. Inflationary gap is observed = (Nominal Wage x Price)/100 Relevant to the interest rate effect Adverse Supply shock - SRAS curve shifts to the left, Real GDP will fall, and the price level will rise The current unemployment rate is above the natural rate of unemployment Declines with an increase in the price level, ceteris paribus Upward sloping SRAS curve The aggregate demand curve shifts to the right