Aggregate Supply Short Run and Long Run

What is the short run aggregate supply curve?

• A. The demand for all goods and services within the entire economy

• B. The supply of all goods and services within the entire economy

• D. The supply of individual goods in the economy

• C. The demand for individual goods in the economy

What is measured on the y-axis of the short run aggregate supply curve graph?

• A. Quantity of real GDP

• B. Price level measured by the CPI or GDP deflator

• D. Inflation rate

• C. Unemployment rate

Why is the short run aggregate supply curve upward sloping?

• B. Because wages and resource prices are sticky in the short run

• C. As a result of government intervention

• A. Due to changes in consumer preferences

• D. Because of changes in technology

What causes a rightward shift of the short run aggregate supply curve?

• D. Increase in business taxes

• C. Decrease in business regulations

• B. Decrease in wages and resource prices

• A. Increase in wages and resource prices

What does the long run aggregate supply curve represent?

• C. The demand for goods and services

• A. The potential long run GDP output

• B. The current GDP output

• D. The supply of goods and services

Why is the long run aggregate supply curve vertical at the Full Employment level of output?

• C. As a result of government policies

• A. Due to sticky wages in the long run

• B. Because of flexible wages in the long run

• D. Because of changes in consumer behavior

What causes a leftward shift of the long run aggregate supply curve?

• A. Increase in human capital

• D. Decrease in the quantity of resources

• C. Increase in technology

• B. Decrease in productivity

How do changes in technology impact the long run aggregate supply curve?

• D. Make it horizontal

• C. Shift it to the right

• B. Have no effect

• A. Shift it to the left

What is the relationship between the production possibilities curve and the long run aggregate supply curve?

• D. The production possibilities curve is a subset of the long run aggregate supply curve

• C. They represent different economic concepts

• B. Both show the long run potential real GDP output

• A. They are unrelated

What is the main factor that impacts productivity in the long run?

• D. Changes in inflation expectations

• C. Changes in government regulations

• B. Changes in physical Capital stock

• A. Changes in consumer preferences