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AS/AD and the Multiplier Flashcards | StudBud

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AS/AD and the Multiplier

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A super-duper cool quiz about aggregate supply and aggregate demand and the multiplier!

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Questions 10

Answers

1
When SRAS increases, input prices
Decline
Rise
2
How is spending multiplied?
The Fed prints more money
Consumers take out loans
The more times money is spent, the more it circulates.
Consumers use credit cards
3
In long-run aggregate supply, wages & resource prices will increase as price levels increases.
False
True
4
What is the equation for MPS?
1/1-MPC
MultiplierXInitial change in spending
Change in saving/change in income
Change in consumer spending/change in income
5
What is the most efficient way to speed the economy?
Print more money
Government spending
Asking Mr. Stuber for money
Cutting taxes
6
Which one of the following is a shifter in aggregate demand?
Change in exports/imports
Change in productivity
Change in resource prices
Change in inflationary expectations
7
What is the equation for MPC?
Change in consumer spending/change in income
Change in saving/change in income
1/MPS
MultiplierXInitial change in spending
8
What is one of the shifters of aggregate supply?
Investments
Consumer spending
Change in government actions
Change in government spending
9
What is the equation for the simple multiplier?
All of the above
None of the above
1/1-MPC
1/MPS
10
In short-run aggregate supply, wages & resources prices will increase as price levels increase.
False
True