How is it possible for the economy to reach Y1 in the short term?

Overtime use of labour and capital

How is a positive wealth effect best described?

Confidence rising as assets appreciate

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Review of AD/SRAS/LRAS

16 termsStudBud Administration29 plays

A quiz on Aggregate Demand and Aggregate Supply

Flashcards16 cardsFPractice quizPHost liveL

Questions 16

Answers

1
All of the following would shift the LRAS to the right except for .....
Higher direct taxes
Greater quality of education
Falling levels of inactivity
Technological progress
2
What is the formula which gives us Aggregate Demand?
C+I+G+(X+M)
C-I+G+(X-M)
C+I+G-T+(X-M)
C+I+G+(X-M)
3
Which of the following would cause a rightward shift in SRAS?
Higher oil prices
Falling exchange rate
Lower VAT (Value Added Tax)
Rising wages
4
Which component of AD is biggest in developed economies?
C
I
G
X
5
What does the Keynesian LRAS allow for that the Classical LRAS does not?
The ability for the full capacity output to shift right
Prolonged recession
Inflation as AD rises near full capacity
An economy operating above full capacity
6
In the Keynesian model of LRAS, if there is a rise in AD, when is inflation most likely?
In a recovery
In a downturn
In a boom
In a recession
7
Which of the following is not a factor which would shift the AD curve?
Changes in confidence
Changes in nominal wages
Changes to the Interest Rate
Changes in real incomes
8
How is it possible for the economy to reach Y1 in the short term?
Costs of production have fallen
Overtime use of labour and capital
Full capcity is higher
AD rises
9
What does the word aggregate mean?
Mean/Average
Median
Total
Subtract
10
What is the impact on AD if oil prices rise?
Shift left in AD
Movement left along AD
Shift right in AD
Movement right along AD
11
How is a positive wealth effect best described?
Confidence rising as assets appreciate
Share dividends rising
Value of an asset rising
House prices falling makes housing afforable
12
Which type of taxation is most likely to shift the AD curve?
Mansion tax
VAT
Income tax
Indirect taxes
13
What is likely to be happening in the following diagram?
Consumer confidence is higher
Oil prices are falling
Demand-pull inflation
Raw material prices are rising
14
What would a rising governmental budget deficit do to AD holding all else equal?
Worsen the trade/(X-M) balance
Improve the trade/(X-M) balance
Shift it left
Shift it right
15
All of the following would shift the LRAS to the right except for .....
More competitive markets
A weaker banking system
The development of an entrepreneurial culture
Improving capital investment conditions
16
What is the key factor in determining the position of the SRAS curve?
Costs of production
Full capacity output of the economy
Consumer confidence
Level of government spending

Review of AD/SRAS/LRAS Flashcards | StudBud

Review of AD/SRAS/LRAS

16 termsStudBud Administration29 plays

A quiz on Aggregate Demand and Aggregate Supply

Flashcards16 cardsFPractice quizPHost liveL

Questions 16

Answers

1
All of the following would shift the LRAS to the right except for .....
Higher direct taxes
Greater quality of education
Falling levels of inactivity
Technological progress
2
What is the formula which gives us Aggregate Demand?
C+I+G+(X+M)
C-I+G+(X-M)
C+I+G-T+(X-M)
C+I+G+(X-M)
3
Which of the following would cause a rightward shift in SRAS?
Higher oil prices
Falling exchange rate
Lower VAT (Value Added Tax)
Rising wages
4
Which component of AD is biggest in developed economies?
C
I
G
X
5
What does the Keynesian LRAS allow for that the Classical LRAS does not?
The ability for the full capacity output to shift right
Prolonged recession
Inflation as AD rises near full capacity
An economy operating above full capacity
6
In the Keynesian model of LRAS, if there is a rise in AD, when is inflation most likely?
In a recovery
In a downturn
In a boom
In a recession
7
Which of the following is not a factor which would shift the AD curve?
Changes in confidence
Changes in nominal wages
Changes to the Interest Rate
Changes in real incomes
8
How is it possible for the economy to reach Y1 in the short term?
Costs of production have fallen
Overtime use of labour and capital
Full capcity is higher
AD rises
9
What does the word aggregate mean?
Mean/Average
Median
Total
Subtract
10
What is the impact on AD if oil prices rise?
Shift left in AD
Movement left along AD
Shift right in AD
Movement right along AD
11
How is a positive wealth effect best described?
Confidence rising as assets appreciate
Share dividends rising
Value of an asset rising
House prices falling makes housing afforable
12
Which type of taxation is most likely to shift the AD curve?
Mansion tax
VAT
Income tax
Indirect taxes
13
What is likely to be happening in the following diagram?
Consumer confidence is higher
Oil prices are falling
Demand-pull inflation
Raw material prices are rising
14
What would a rising governmental budget deficit do to AD holding all else equal?
Worsen the trade/(X-M) balance
Improve the trade/(X-M) balance
Shift it left
Shift it right
15
All of the following would shift the LRAS to the right except for .....
More competitive markets
A weaker banking system
The development of an entrepreneurial culture
Improving capital investment conditions
16
What is the key factor in determining the position of the SRAS curve?
Costs of production
Full capacity output of the economy
Consumer confidence
Level of government spending