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Aggregate Demand, Aggregate Supply and the Business Cycle Flashcards | StudBud
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Aggregate Demand, Aggregate Supply and the Business Cycle
Aggregate Demand, Aggregate Supply and the Business Cycle
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graphing AS and AD, defining stagflation
Flashcards
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Questions
10
Answers
1
If the economy is operating at a peak in a business cycle, on an AS/AD graph it would be
at full employment
below full employment
left of full employment
above full employment
2
The shift to
AD'
could be caused by
a decrease in I
an increase in Xn
an increase in AS
an increase in T
3
The order of the shifts in the graph below is __________ then _________.
AD↑, AS↑
AD ↑, AS ↓
AS↑, AD↓
AS↓, AD↑
4
Left alone, an economy will always gravitate towards
unemployment
full employment
recession
inflation
5
A combination of recession (rising unemployment) and inflation (rising prices) is called
misery
disintermediation
stagflation
disinflation
6
Expansionary Fiscal Policy would best be used during
recession
inflation
full employment
expansion
7
The shift from AS to AS1 could be caused by
an increase in technology
an increase in imports
a decrease in the price of oil
an increase in wages
8
The shift from D to D' could be caused by
an increase in C
an increase in I
an increase in T
an increase in G
9
The shift from AS
1
to AS
2
could be caused by
an increase in G
a decrease in immigration
an increase in technology
a decrease in I
10
A gap that exists when real GDP exceeds potential GDP and that brings a rising price level is
a recessionary gap.
a market failure.
a full employment gap.
an inflationary gap.
