An increase in the price level will:

drop purchasing power of personal wealth & drop consumption.

If the government reduces income tax, this will cause

AD increase as disposable income increases

Refer to the graph. The shift from AD1 to AD2 may have been caused by:

a decrease in government spending.

Which of the following will NOT cause consumption to increase

inflationary expectations decrease

An increase in the incomes of NZ trading partners would shift the NZ.:

aggregate demand curve to the right.

Higher prices of imported resources will:

shift the AS supply curve to the left.

Which of the following will not shift AS left?

A new cost-reducing production technology.

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AS/AD

10 termsStudBud Administration269 plays

Aggregate Supply and Aggregate Demand

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Questions 10

Answers

1
An increase in migration will
Increase AD
Increase AD and Decrease AS
Increase AS
Decrease AS
2
An increase in production costs will:
shift AS left.
shift AD right.
shift AS right.
shift AD left.
3
An increase in the price level will:
reduce the value of household debt & increase investment.
increase production costs & reduce short-run AS.
drop purchasing power of personal wealth & drop consumption.
increase net exports.
4
If the government reduces income tax, this will cause
AD increase as disposable income increases
AD decrease as disposable income decreases
AS increasing as nominal wages increase
AS decrease as nominal wages decrease
5
Refer to the graph. The shift from AD₁ to AD₂may have been caused by:
a decrease in government spending.
a reduction in the price level.
a decline in personal taxes.
a reduction in aggregate supply.
6
The government increases the minimum wage, this will cause
AS increasing, PL decreasing
AS decreasing, PL increasing
AD increasing, PL increasing
AD decreasing, PL decreasing
7
Which of the following will NOT cause consumption to increase
Interest rates decrease
inflationary expectations decrease
Direct tax decrease
consumer confidence increase
8
An increase in the incomes of NZ trading partners would shift the NZ.:
aggregate supply curve to the left.
aggregate demand curve to the left.
aggregate supply curve to the right.
aggregate demand curve to the right.
9
Higher prices of imported resources will:
move the economy downward & to the right along the AD curve
shift the AD curve to the left.
make the AD curve steeper.
shift the AS supply curve to the left.
10
Which of the following will not shift AS left?
A sudden increase in energy prices.
A new cost-reducing production technology.
An increase in the expected price level.
An increase in the wage rate.

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