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Topic 5 & 6 Aggregate Demand & Aggregate Supply Flashcards | StudBud

Explore/Topic 5 & 6 Aggregate Demand & Aggregate Supply

Topic 5 & 6 Aggregate Demand & Aggregate Supply

8 terms·StudBud Administration·21 plays

A revision quiz for the AD/AS topic

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Questions 8

Answers

1
What could have caused this situation?
A weaker currency
Increased interest rates
Improvement in the quality of factors of production
Increase in government spending
2
In the AD/AS model what is "full employment"?
when the economy is at the "peak"
0% unemployment
unemployment when the economy is producing at it's potential
some unemployment
3
If MPC is 0.75, the government injects $50bn to the economy. What is the final increase in GDP?
$100bn
$75bn
$200bn
$125bn
4
What has caused an increase in AD?
Increase in interest rates
Decrease in Interest rates
Consumers pessimism
Wages growth
5
What could have caused this shift?
A decrease in the price of oil
Increase in education spending
A war in the country
A decrease in wage rates
6
What could have caused this shift?
Increase in interest rates
Price of oil falls
Decrease in interest rates
Increase in wages
7
What are the 3 factors that make AD curve slope downwards?
Trade Protection, Tariffs, Quotas
Business confidence, Government spending, Wealth
Wealth effect, Interest rate effect , exchange rate effect
Consumption, Investment, Government Spending, Net Exports
8
What could have caused this increase in supply ?
Increase in the price of oil
Reduced regulation for firms
The wealth effect
Increase in corporate tax rates