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Macro Unit 2-AD/AS Flashcards | StudBud
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Macro Unit 2-AD/AS
Macro Unit 2-AD/AS
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Questions
15
Answers
1
Which of the following government policies will shift AD to the left?
Increase in gov't spending
Increase in transfer payments
Decrease in taxes
Increase in interest rates
2
All of the following will reduce real GDP EXCEPT
Increase in Government Spending
Increase in Interest Rate
Decrease in consumer income
Decrease in net exports
3
A decrease in _______ because of a decrease in stock market will shift AD to the left because?
Consumer wealth
Tax revenues
Price Level
Interest rates
4
Longrun AS curve is always _____ b/c changes in aggregate price level have no long term effect
Fixed
Vertical
Negatively sloped
Horizontal
5
Which will shift the AD curve to the right?
Increase in Government Spending
Decrease in quantity of money
Decrease in wealth
Pessimistic Consumer Expectations
6
All are reasons the aggregate demand curve is downward sloping EXCEPT
Real balance effect
Interest rate effect
Substitution Effect
Foreign Trade effect
7
The Natural Rate of Unemployment is made up of...
Seasonal & Cyclical
Cyclical & Frictional
Structural & Frictional
Technological, Cyclical, & Seasonal
8
All are included in the GDP EXCEPT....
Sale of import within US borders
Paying rent for an apt
Sale of a new car
Sale of marshmellows to Cold Stone
9
When the full-employment level exceeds the level of aggregate expenditures, which will happen?
Hyperinflation
Deflation
Inflationary Gap
Recessionary Gap
10
A change in ________ will shift the AS curve?
Nominal wages
All answers work
Productivity
Commodity prices
11
In the short run, firms make profits off price level changes due to
Fixed input prices
Flexible wages
Fixed output prices
Negotiable Contracts
12
The long run AS curve also shows
Recession Unemployment Rate
Cyclical Unemployment
Near Full Employment
Natural Unemployment Rate
13
Stagflation occurs when
Real GDP Down & PL down
Nominal GDP Down & PL increase
Unemployment & PL increase
Real GDP Up & PL Down
14
Which causes a NEGATIVE supply shock?
Increase in productivity
Increase in oil prices
Boom in education opportunities
Technological advancement
15
Hyperinflation refers to
Gradual increase in prices
Rapid increase in prices but money still a good value
Rapid increase in prices
Decline in real GDP & increase in PL
