The AD /AS model

The AD/AS model shows the relationship between output and

• the price level

• income

• aggregate expenditure

• taxation

The Aggregate Supply curve shows

• the impact of changes in output on the price level

• the impact of the price level on output

What is on the "Y" axis on an AD/AS Model?

• Real GDP
• ouput
• price level
• price

What is represented on the "X" axis on the AD/AS Model?

• price level
• price
• Real GDP
• Nominial GDP

What is the vertical line called on the AD/AS Model?

• short-run aggregate supply
• aggregate demand
• long run aggregate supply
• r GDP

What would cause AD to decrease?

• an increase in taxes
• a decrease taxes
• an increase in government spending
• keeping government spending constant

The AD curve slopes down because

• at high prices less is consumed and produced

• its the same as demand curve

• supply has to cut across

• all of these reasons

If there is an increases in wages and firms pay more when producing goods then the

• AD curve shifts right

• AD curve shifts left

• AS curve shifts right

• AS curve shifts left

Which of the following factors will not shift the AD curve right?

• increase in the cost of labour

• increase in consumer confidence

• increased exports

• increased investment

What would happen if the volume of imports into australia increased?

• AD shift left

• AD shift right

• AS shift left

• As shift right