Economics - AS

The definition of AS is which of the following?

• Total supply of goods and services produced within an economy at a given price in a given period

• Total of consumer spending, investment, government spending, and net exports

• Total demand for goods and services produced within an economy at a given price in a given period

• Total supply of goods and services produced for export within an economy

Why does the AS curve slope upwards?

• Due to the wealth effect on consumption

• As the price level falls the interest rate also tends to fall

• Lower prices leads to an increase in demand for exports

• Firms do not have flexibility to vary inputs in short run, so will only increase production by varying intensity of utilisation of inputs in response to higher prices

A shift in the AD curve will have what impact on AS?

• Shift left

• Contraction / expansion

• Shift right

Which of the following changes will cause the AS curve to shift?

• Costs of production

• Labour productivity

• Price levels

• Taxes such as VAT

• Shifts in the AD curve

An increase in wages will cause what impact to the AS curve?

• Shift right

• Expansion

• Contraction

• Shift left

The long run aggregate supply curve is influenced by which of the following factors? Choose three.

• Size of the workforce

• Level of education and training

• Prices

• Consumer expenditure

• Labour productivity

This graph represents which view of LRAS?

• Keynesian

• Classical

When the economy has plenty of spare capacity and LRAS is elastic, an increase in AD will lead to what impact on prices?

• Significant inflation

• Hyperinflation

• Modest increase in prices

• Reduction in prices

When the economy is close to the full employment level of national income and LRAS is inelastic, an increase in AD will lead to what impact on prices?

• Significant inflation

• Reduction in demand

• Modest increase in prices

• Reduction in prices

An increase in the quantity and / or quality of factors of production will have what impact on the LRAS curve (and / or PPF)?

• Shift left

• No impact

• Shift right