AD-AS Model

Aggregate demand and Aggregate supply model uses to show the determination of __________ in an economy.

• Real GDP and income level

• Real GDP and standard of living

• Real GDP and price level

• Real GDP and cost level

The quantity of goods and services purchased at all possible price levels is known as.

• Demand

• Supply

• Aggregate demand

• Aggregate supply

The relationship between quantity demanded of real GDP (AD) and the price level is __________.

• Positive

• Negative

• Constant

• Linear

A fall in price cause a __________ in AS.

• Expansion

• Contraction

• Increase

• None of the options

What is true at macroeconomic equilibrium?

• AD = AS

• AD > AS

• AD < AS

• AD + AS = 1

Given the graph of the short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves above, which of the following is true?

• At point Z, the economy has cyclical unemployment.

• At point Z, the economy is in long-run equilibrium but not in short-run equilibrium.

• At point Y, the natural rate of unemployment is zero.

• At point X, the economy is experiencing a recessionary gap.

• At point X, there is no frictional unemployment.