M6 Practice Quiz ECON 2301

Phillips Curve is used by Economists for long term period.

• True

• False

If a country's economy is near its potential GDP then changes in aggregate demand will change what?

• unemployment

• output

• input

• price

If a country's economy is far below its potential GDP then changes to aggregate demand will affect what?

• unemployment

• price

• SRAS curve

• LRAS curve

If the SRAS curve shifts right this leads to what?

• inflation, higher unemployment

• deflation, lower unemployment

A closed economy is one that is linked to the outside world through trade and financial transactions

• True

• False

If the AD curve shifts left this leads to what?

• higher unemployment; deflation

• higher unemployment; inflation

• lower unemployment; deflation

• lower unemployment; inflation

AD curve shifts right this leads to what?

• higher unemployment; inflation

• lower unemployment; inflation

• higher unemployment; deflation

• lower unemployment; deflation

If a country's exports exceeds imports then what is their trade balance and funds?

• surplus; outflow

• deficit; outflow

• surplus; inflow

• deficit; inflow

If a country's imports exceeds exports then what is their balance and funds?

• surplus; outflow

• surplus; inflow

• deficit; outflow

• deficit; inflow

If the SRAS curves shifts to the left this means what?

• deflation; higher unemployment

• deflation; lower employment

• inflation; lower unemployment

• inflation; higher unemployment