The Aggregate Demand Aggregate Supply Model Mcqs
MCQ: Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?
- Price fall; output rises
- Price fall; output falls
- Price rise; output fall
- Price rise; output rise
Releted Questions
The Aggregate Demand Aggregate Supply Model Mcqs
MCQ: Which of the following statements about economic fluctuations is true ?
- None of these answers
- A depression is a mild recession
- A variety of spending income, and output measures can be used to measure economic fluctuation because most macroeconomic quantitties tend to fluctuate
- A recession is when output rises above the natural rate of output
C
MCQ: Which of the following would not cause a shift in the long-run aggregate supply curve ?
- All of these answers shift the long-run aggregate supply curve
- An increase in the available capital
- An increase in the available labour
- An increase in price expectations
D
MCQ: In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to ?
- shift the short-run aggregate supply curve to the left
- shift the aggregate demand curve to the right
- shift the short-run aggregate supply curve to the right
- shift the aggregate demand curve to the left
B
MCQ: Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply cruve ?
- Is vertical because an equal change in all prices and wages leaves output unaffected
- is positively sloped because price expectations and wages tend to be fixed is the long run
- shifts right when the government raises the minimum wage
- shifts left when the natural rate of unemployment falls
A
MCQ: The natural rate of output is the amount of real GDP produced ?
- When the economy is at the natural rate of unemployment
- When the economy is at the natural rate of investment
- When the economy is at the natural rate of aggregate demand
- When there is no no unemployment
A