SR and LR Aggregate Supply DCO

What are the determinants of long run aggregate supply?

• Changes in technology, changes in the quantity and quality of resources, changes in investment.

• Changes in fiscal policy, changes in monetary policy, changes in business cycles, changes in unemployment rates

• Changes in consumer preferences, changes in income levels.

• Changes in demand, changes in government spending.

What are the determinants of short run aggregate supply?

• changes in input prices, taxes, exchange rates.

• changes in output prices.

• changes in consumer spending.

• changes in exports.

What causes shifts in long run aggregate supply?

• Changes in fiscal policy, monetary policy, and exchange rates.

• Changes in consumer spending, business investment, and net exports.

• Changes in demand, inflation, and interest rates.

• Changes in technology, labor force, capital stock, and government regulations or policies.

What is the difference between neoclassical and Keynesian long run aggregate supply?

• The neoclassical curve suggests the economy is always at the full employment level of output

• The keynesian curve suggests the economy is always at the full employment level of output

What is the difference between neoclassical and Keynesian long run aggregate supply?

• The keynesian curve suggests that output can be below the full employment level in the long run.

• The neo classical curve suggests that output can be below the full employment level in the long run.

What happens to long run aggregate supply when there is an increase in technology?

• An increase in technology leads to a decrease in long run aggregate supply.

• An increase in technology has no effect on long run aggregate supply.

• An increase in technology leads to a decrease in short run aggregate supply.

• An increase in technology leads to an increase in long run aggregate supply.

What happens to short run aggregate supply when there is an increase in wages?

• decreases

• fluctuates

• remains unchanged

• increases

The Keynesian approach suggests the level of aggregate demand can determine output in the long run.

• TRUE

• FALSE

What causes a rightward shift in short run aggregate supply?

• Decrease in availability of resources or deterioration in technology

• Increase in demand for goods and services

• IDecrease in costs of resources

• Decrease in government spending

What causes a leftward shift in long run aggregate supply?

• Increase in availability of resources or decrease in production costs

• Increase in availability of resources or increase in production costs

• Decrease in availability of resources or decrease in production costs

• Decrease in availability of resources or increase in production costs