Mr. Maurer
AP Economics
Homework for Monday, February 1, 2016
Read Chapter 30, Sections 1 & 2 and answer the following:
Part A – Aggregate Demand
1. How is the explanation for the downward slope of the aggregate demand curve different from
the explanation of the downward slope of an individual product’s demand curve? In your answer,
explain the Real-Balances Effect, the Interest-Rate Effect, and the Foreign Purchases Effect.
2. Identify the determinants of aggregate demand (aggregate demand shifters) and briefly explain
how each affects aggregate demand.
Part B – Aggregate Supply
3. What effect does a change in the price level have on long-run aggregate supply? Explain.
4. What effect does a change in price level have on short-run aggregate supply?
5. Explain why the slope of the short-run aggregate supply curve increases as output increases.
6. Identify the determinants of aggregate supply (aggregate supply shifters) and briefly explain
how each of them affects the aggregate supply curve.
Mr. Maurer
AP Economics
Homework for Monday, February 1, 2016
Read Chapter 30, Sections 1 & 2 and answer the following:
Part A – Aggregate Demand
1. How is the explanation for the downward slope of the aggregate demand curve different from
the explanation of the downward slope of an individual product’s demand curve? In your answer,
explain the Real-Balances Effect, the Interest-Rate Effect, and the Foreign Purchases Effect.
2. Identify the determinants of aggregate demand (aggregate demand shifters) and briefly explain
how each affects aggregate demand.
Part B – Aggregate Supply
3. What effect does a change in the price level have on long-run aggregate supply? Explain.
4. What effect does a change in price level have on short-run aggregate supply?
5. Explain why the slope of the short-run aggregate supply curve increases as output increases.
6. Identify the determinants of aggregate supply (aggregate supply shifters) and briefly explain
how each of them affects the aggregate supply curve.