AP Macro Unit 3 Midway Practice

Which determinant below does not shift aggregate supply?

• Inflationary expectations

• Change in resource prices

• Changes in actions of the government

• Changes in productivity

• Change in investment spending

The long run aggregate supply curve is vertical because...

• Price level increases but GDP doesn't

• GDP increases but price level doesn't

• GDP decreases but price level doesn't

• Price level decreases but GDP doesn't

The long run aggregate supply curve (LRAS) is at the point of

• 0% unemployment

• Full-employment

• Peak of the business cycle

• Cyclical unemployment

• Trough of the business cycle

Changes in price level

• Shift the AD curve left (decrease)

• Shift the AD curve right (increase)

• Move along the AD/SRAS curve

• Shift the AS curve right (increase)

• Shift the AS curve left (decrease)

Which determinant below does NOT shift aggregate demand?

• Change in consumer spending

• Change in investment spending

• Change in government spending

• Change in net exports

• An increase in taxation

Assume the economy is in long run equilibrium and the government increases spending on healthcare

• AD will shift right and an inflationary gap will result

• AD will shift left and a recessionary gap will result

• AS will shift right and an inflationary gap will result

• AS will shift left and a recessionary gap will result

• No change will result

Assume the economy is in long run equilibrium and trading partners increase the price of oil, a key resource

• AD will shift right and an inflationary gap will result

• AD will shift left and a recessionary gap will result

• AS will shift right and an inflationary gap will result

• AS will shift left and a recessionary gap will result

• No change will result

Assume that the economy is at long run equilibrium and that the government increases spending. In the short run, AD will increase. In the long run, what will happen?

• AD will decrease

• AS will decrease back to equilibrium

• AD will increase

• AS will increase back to equilibrium

• LRAS will shift right

Which of the following would increase aggregate demand?

• Increased saving

• Increasing import spending

• Increased taxation revenue

• Increased investment

• Increased interest rates

Improved training of employees would:

• Shift SRAS outwards at each price

• Shift SRAS inwards at each price

• Shift LRAS to the right

• Shift AD outwards at each price

• Shift AD inwards at each price