J. An Increase in exports that exceeds an increase in imports
(not due to tariffs).
7. True or False: Decreases in AD normally lead to decreases
in both output and the price level. LO30.6
8. Assume that (a) the price level is flexible upward but not
downward and (b) the economy is currently operating at its
full-employment output. Other things equal, how will each
of the following affect the equilibrium price level and equi-
librium level of real output in the short run? LO30.6
a. An increase in aggregate demand.
b. A decrease in aggregate supply, with no change in
aggregate demand.
c. Equal increases in aggregate demand and aggregate
supply.
d. A decrease in aggregate demand.
e. An increase in aggregate demand that exceeds an increase
in aggregate supply.
9. True or False: If the price of oil suddenly increases by a
large amount, AS will shift left, but the price level will not
rise thanks to price inflexibility. LO30.6