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A Game of X’s and O’s
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Scoreboard
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X
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O
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Click Here if
X Wins
Click Here if
O Wins
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1
What is the assumption that what is true for
the parts must also be true for the whole?
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Fallacy of Composition
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Explain why the aggregate demand curve
slopes downward.
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High price level  low demand.
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Low price level high demand.
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TThe flat section of the aggregate supply curve
is called the _____ range
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Keynesian Range
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4
In what range does the inflationary gap
occur?
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Intermediate range
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5
The government increases the tax rate for
consumers. Which curve shifts and in
which direction?
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The aggregate demand curve shifts to the
left.
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6
In the classical range, what happens to real
output and price level when the AD curve
shifts to the right?
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There is no change in real output and the
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price level increases.
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What are the four shifters for aggregate
demand?
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Consumption, investment, government
spending, net exports.
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Policies designed to increase aggregate supply, as
opposed to aggregate demand are called
______ ______ policies.
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Supply-side.
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In what range does the recessionary gap
occur?
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The Keynesian Range.
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