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Aggregate Supply and Aggregate Demand Flashcards | StudBud
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Aggregate Supply and Aggregate Demand
Aggregate Supply and Aggregate Demand
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StudBud Administration
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Questions
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Answers
1
What does Q
f
represent in this graph?
Unemployment
Natural rate of unemployment
Full employment
Potential employment
2
What could cause this shift?
Increase in government red tape
Increase in productivity
Decrease in government red tape
Decrease in business taxes
3
What is the economy suffering from in the graph?
stagflation
elevated price level
Inflation
recession
4
What happens to unemployment in this graph?
Same as change in GDP
Unchanged
Decreases
Increases
5
What could cause the shift in the graph?
Increase in government spending
Increase in investment spending
Increase in export spending
Increase in personal taxes
6
Which area of aggregate demand would new housing fall under?
Investment
Government spending
Net exports
Consumption
7
What is the vertical section of the three tier SRAS curve called?
Monetarist
Intermediate
Keynsian
Classical
8
What happens to the aggregate demand curve when the savings rate increases?
It shifts left
It does not shift
It is inverted
It shifts right
9
What would cause this shift?
Decrease in government spending
Increase in exports
Decrease in investment
Increase in productivity
10
Which of the following would not affect LRAS?
↑Technology
↑Human capital
↑Capital stock
↑Price level
11
When disposible income falls, what happens to the aggregate demand curve?
it shifts right
it is inverted
it shifts left
it does not change
12
What could cause the shift in AS?
Increase in consumption
Decrease in government spending
Increase in business taxes
Decrease in wages
13
What could cause the shift below?
Decrease in investment
Increase in government spending
Decrease in taxes
Increase in price level
14
What is the vertical axis of the aggregate demand curve?
Price Level
Income
Output
Interest rate
15
What happens to the aggregate demand curve when the marginal propensity to consume increases?
It stays the same
It increases
It is inverted
It descreases
16
Why is LRAS vertical?
Price level is fixed
Production decreases
Production increases
Neutrality of money
17
The tax multiplier is always
negative
= spending multiplier
< 1
positive
18
Fear of a future economic downturn would most likely lead to
↑employment
↑Price level
↑AD
↓AD
19
What area of aggregate demand does movie tickets fall under?
Net exports
consumption
government spending
investment
20
MPS and MPC are equal to
One
Tax multiplier
Spending multiplier
Two
