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Macroeconomic Equilibrium
Macroeconomic Equilibrium
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Basics of AD, AS and Macroeconomic equilibrum. IB Econ Syllabus
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Questions
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Answers
1
The assets that people own is counted as part of their....
Wealth
Income
2
Which of the following in NOT a macroeconomic objective?
Low and stable rate of inflation
Low level of employment
Steady increase in national output (growth)
Equitable distributioon of income
3
Which of the following is an injection into the circular flow?
Investment
Imports
Savings
Taxes
4
A vertical LRAS curve is a ....
Keynesian LRAS
New Classical LRAS
5
If AD intersects SRAS at an output level below full employment the resulting gap is called...
The output gap
The inflationary gap
The deflationary gap
The unemployment gap
6
A contraction of the economy would occur in which part of the business cycle?
Recovery
Recession
Peak
7
The policy which deals with government spending and revenue is called...
Fiscal Policy
Monetary Policy
8
Which of the following is a method for calculating GDP?
The expenditure method
The Gawler approach
The savings approach
The rewards approach
9
If interest rates were to increase, what would the affect on AD be?
It would remain the same
It would decrease
It would increase
10
More spending on durable goods would cause an increase in...
C
I
(X - M)
G
11
What is the equation for calculating GDP?
GDP = C + I + P + (X - M)
GDP = C + I + G + (X - N)
GDP = C + I + G + (X - M)
GDP = C + Y + G + (X - M)
12
What goes on the horizontal axis of an AD/AS diagram?
Capital goods
LRAS
Real output
Average price level
13
Which of the following pairs of factors of production and rewards is not correct?
Labour & Wages
Entrepreneurship & Salaries
Land & Rent
Capital & Interest
14
Which of the following is an interventionist supply-side policy?
Reducing income tax
Tax incentives linked to R&D spending
Privatisation
Reducing the minimum wage
15
If the productive potential of an economy was to increase, how would this be shown on a PPC?
The economy would move to a point closer to the PPC
The PPC would shift outwards
The PPC would shift inwards
