National income, LRAS, SRAS

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

Which of the following equations represents Aggregate Demand

• GDP = X + I + C + (Y - Z)

• GDP = C + I + G + (X - M)

• GDP = C + I + X + (G - T)

• GDP = (1/MPS)*G + I + C

the level of disposable income determines the level of ____________________.

• consumption expenditure

• private expenditure

• government expenditure

• net export

Which of the following events shifts the short-run aggregate supply curve to the right?

• a decrease in the money supply

• a drop in oil prices

• an increase in government spending on military equipmentd

• an increase in price expectations

Suppose the economy is initially in long-run equilibrium. Then suppose there is a drought that destroys much of the wheat crop. According to the model of aggregate demand and aggregate supply, what happens to prices and output in the short run?

• Prices rise; output falls.

• Prices fall; output rises.

• Prices rise; output rises.

• Prices fall; output falls.

Which of the following shows the most appropriate labels for the boxes marked X, Y and Z? 

•   X = Expenditure, Y = Banks, Z = Interest Payments

• B   X = Expenditure, Y = Banks, Z = Interest Payments

• C   X = Investment, Y = Government, Z = Wages

• D   X = Spending, Y = Firms, Z = Factors of Production

Which of the following are injections into the circular flow of income?

• Household spending, wages and rent

• Government spending, investment and imports

•   Savings, capital and exports

• Investment, government spending and exports

The image shown here depicts which form of LRAS curve?

• Neoclassical

• Keynesian

• Austrian

• Short run

The following shift in the AD could be caused by what?

• A decrease in consumer confidence

• An increase in the price level

• An increase in imports

• An increase in investment

The shift from LRAS1 to LRAS2 could be caused by what?

• Discovery of new land

• Increase in the birth rate

• Apprenticeships

• Research and development

• All of the above