According the the Aggregate Demand/Aggregate Supply model, the economy will always eventually converge to _________ in the long run.

Assume initially that the economy is in long run equilibrium. Unexpectedly, a negative demand shock occurs.  If the Federal Reserve does not respond to the shock with appropriate monetary policy, then we would expect 

Assume initially that the economy is in long run equilibrium. Unexpectedly, a negative supply shock occurs.  If the Federal Reserve does not respond to the shock with appropriate monetary policy, then we would expect

In 2007 and 2008, the world experienced a global financial crises along with rising oil prices.  According to aggregate demand and supply analysis, we should expect the unemployment rate to ________ and the level of real aggregate output to ________ in the short-run.

Financial frictions affect aggregate demand.  How so?  

Economists consider “activist policymakers” as those who think that 

Assume that current output exceeds potential output.  Over time, we would expect _______ to ________, thereby causing ______ to decrease.  

The Federal Open Market Committee

Banks hold excess reserves for a number of reasons.  If banks decide to decrease their holdings of excess reserves, we will observe __________, all else constant.

Suppose that the Federal Reserve pursued a loose, or easy, monetary policy.  We would then expect _____ to ________, holding all else constant.