Aggregate Supply and Aggregate Demand

A strong rise in energy cost is likely to lead to

• A rise in real GDP and the price level

• A fall in GDP and the price level

• A fall in real GDP but a rise in the price level

• A rise in real GDP but a fall in the price level

Net exports will increase if:

• there is a decrease in foreign Real GDP

• the exchange rate for the dollar depreciates

• Both of the above

• Neither of the above

An increase in short-run aggregate supply could be caused by:

• an increase in wage rates

• an increase in productivity

• an adverse supply shock

• All of the above

The short-run aggregate supply curve shifts in response to a change in:

• consumption

• government purchases

• overall costs of production

• All of the above

Increases in AD tend to cause:

• the price level to increase

• Real GDP to decrease

• the unemployment rate to increase

• All of the above

Decreases in SRAS tend to cause:

• the price level to decrease

• Real GDP to decrease

• the unemployment rate to increase

• Both b. and c. above

An increase in productivity will tend to cause:

• the price level to decrease

• Real GDP to increase

• the unemployment rate to decrease

• All of the above

When taxes decrease, consumption

• increases, so aggregate demand shifts right

• increases, so aggregate supply shifts right

• decreases, so aggregate demand shifts left

• decreases, as aggregate supply shifts left

Consumption would decrease and aggregate demand would shift

• right if taxes increase

• right if taxes decreases

• left in taxes increased

• left if taxes decreased

When the government spends more, the initial effect is that

• aggregate demand shifts right

• aggregate demand shifts left

• aggregate supply shifts right

• aggregate supply shifts left