Aggregate Model Quiz

What happens when there is an improvement in technology?

• Both SRAS and LRAS shift to the left

• Both SRAS and LRAS shift to the right

• AD shifts to the right

• Only SRAS shifts to the right

Which of the following is a determinant of short run aggregate supply?

• Consumer confidence

• Government spending

• Price of an important natural resource

• Foreign exchange rates

An increase in consumer confidence will cause the aggregate demand curve to:

• Shift to the left

• Shift to the right

• Become steeper

• Become flatter

What shape is the aggregate demand curve typically?

• Upward sloping

• Downward sloping

• Vertical

• Horizontal

Which of the following factors does not cause a shift in the long run aggregate supply curve?

• An increase in natural resources

• Changes in input prices

• New Technology

• Increase in labour productivity

A decrease in taxes will likely cause the aggregate demand curve to:

• Shift to the left

• Shift to the right

• Become steeper

• Become flatter

What is the typical shape of the short-run aggregate supply curve?

• Upward sloping

• Downward sloping

• Vertical

• Horizontal

A decrease in government spending will cause the ________ curve to__________:

• SRAS; shift to the left

• AD; shift to the right

• LRAS; shift to the right

• AD; shift to the left

What is the typical shape of the long-run aggregate supply curve?

• Upward sloping

• Downward sloping

• Vertical

• Horizontal

Which of the following can cause a shift in the short run aggregate supply curve?

• Changes in consumer confidence

• Adjustments of firms to errors in past expectations about the price level

• Changes in interest rate

• Sticky wages