MBEC 6001 AD-AS Model
Authored by Sara Linjawi
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University - Professional Development
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10 questions
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1.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that the government announces a 5% increase in VAT (Value-added Tax).
Will this event affect AD or AS?
AD
AS
2.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that the government announces a 5% increase in VAT (Value-added Tax).
Will this event cause a positive or negative shock?
Positive Shock
Negative Shock
3.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that the government announces a 5% increase in VAT (Value-added Tax).
Using the AD-AS model, illustrate the effect of this event on output and prices.
4.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that the government announces a 5% increase in VAT (Value-added Tax).
What effect does this event have on output and prices?
Higher output level and higher price level.
Lower output level and lower price level.
Higher output level and lower price level.
Lower output level and higher price level.
5.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that the government announces a 5% increase in VAT (Value-added Tax).
How can you describe the state of the economy in the short-run?
The economy is experiencing a recession and deflation.
The economy is experiencing a recession and inflation (i.e. stagflation).
The economy is experiencing an expansion and inflation.
The economy is experiencing an expansion and deflation.
6.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that there is an unexpected increase in wages.
Will this event affect AD or AS?
AD
AS
7.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Suppose that there is an unexpected increase in wages.
Will this event cause a positive or negative shock?
Positive Shock
Negative Shock
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