AD/AS Model and Economic Situations

Question 1

If AS where is shift to the right, what would happen to price level and unemployment?

Accepted Answer

Price Level Decreases, Unemployment Decreases

Question 2

To properly show a recessionary gap, the FE line should be drawn _______ equilibrium.

Accepted Answer

to the right of

Question 3

ID the economic situation: Inf. Rate of 2.5%; Unempl. Rate of 5%; Real GDP growth of 3%

Accepted Answer

Full Efficiency

Question 4

If AD where is shift to the right, what would happen to price level and real GDP?

Accepted Answer

Price Level Increases, Real GDP Increases

Question 5

ID the economic situation: Inf. Rate of 0.5%; Unempl. Rate of 7%; Real GDP growth of -1%

Accepted Answer

Recessionary Gap

Question 6

To show Stagflation, you most show the _______ curve shifting ______

Accepted Answer

AS; Left

Question 7

ID the economic situation: Inf. Rate of 3.7%; Unempl. Rate of 4.9%; Real GDP growth of 3%

Accepted Answer

Inflationary Gap

Question 8

ID the economic situation: Inf. Rate of 15%; Unempl. Rate of 7%; Real GDP growth of -8%

Accepted Answer

Stagflation

Question 9

ID the economic situation: Inf. Rate of -3%; Unempl. Rate of 12%; Real GDP growth of 0%

Accepted Answer

Recessionary Gap

Questions 9