Equilibrium in the AD–AS Model

Equilibrium in the AD–AS Model

Assessment

Passage

Social Studies

12th Grade

Practice Problem

Hard

Created by

Wayground Content

FREE Resource

9 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What causes demand-pull inflation?

A decrease in the price level

A leftward shift of aggregate demand

A decrease in aggregate supply

An increase in aggregate demand

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a consequence of a recession resulting from a leftward shift of aggregate demand?

Downwardly inflexible price level

Increase in aggregate supply

Decrease in price level

Increase in real GDP

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a reason for prices being downwardly inflexible?

Minimum wage law

High elasticity of demand

Menu costs

Fear of price wars

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What causes cost-push inflation?

An increase in aggregate demand

A decrease in aggregate demand

A decrease in aggregate supply

An increase in aggregate supply

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effect of growth, full-employment, and relative price stability on the AD-AS model?

Shift of AD to the left

Decrease in the equilibrium price level

Both AD and AS shift to the right

Shift of AS to the right

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What triggered the Great Recession according to the text?

A rise in short-term interest rates

A decrease in federal spending

A housing collapse

An increase in aggregate supply

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the Federal Reserve's response to the recession?

Lowering short-term interest rates

Increasing federal spending

Raising short-term interest rates

Decreasing aggregate demand

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