AP Macro: Aggregate Supply

What is a time of high inflation and high unemployment called?

• Deflation
• Stagflation
• A Depression
• Super Inflation

The intersection of the aggregate demand and aggregate supply curve occurs at the economy’s equilibrium level of

• Nominal investment and the interest rate       
• Government taxes and employment
• Real disposable income and unemployment     
• Real domestic output and the price level

Refer to the above diagram. If the initial aggregate demand and supply curves are AD₀ and AS₀, the equilibrium price level and level of real domestic output will be: 

• F and C, respectively.
• G and B, respectively.
• F and A, respectively.
• E and B, respectively.

Shows the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy

• Aggregated Supply
• Aggregated Demand
• Budget
• Labor force

The economy's long-run aggregate supply curve

• slopes upward and to the right.
• is vertical.
• is horizontal.
• slopes downward and to the right.

Other things equal, an improvement in productivity will: 

• shift the aggregate demand curve to the left.
• shift the aggregate supply curve to the left.
• shift the aggregate supply curve to the right
• increase the price level.

Which of the following is not a shift factor for SRAS?

• Legal Institutional Environment
• Productivity
• Investment
• Input Prices

What would be the effect of a decrease in regulations on businesses?

• Increase AD
• Decrease AD
• Increase SRAS
• Decrease SRAS

The aggregate supply curve (short-run) slopes upward and to the right because: 

• changes in wages and other resource prices completely offset changes in the price level.
• the price level is flexible upward but inflexible downward.
• supply creates its own demand.
• wages and other resource prices adjust only slowly to changes in the price level.

Point A represents

• a short-run equilibrium and a long-run equilibrium.

• a short-run equilibrium but not a long-run equilibrium.

• a long-run equilibrium but not a short-run equilibrium.

• neither a short-run equilibrium nor a long-run equilibrium.

• an economy in short-run equilibrium not yet at the full-employment level of real GDP.