OCR Eco: Chap 5b Aggregate Supply

What does aggregate supply refer to in economics?

• The total amount of goods and services that all firms in an economy are willing and able to produce at a given price level and within a specific time period.

• The total demand for goods and services in an economy at a given price level and within a specific time period.

• The total amount of goods and services that consumers are willing to buy at a given price level and within a specific time period.

• The total amount of goods and services that the government is willing to produce at a given price level and within a specific time period.

What does the short-run aggregate supply curve (AS) show?

• The relationship between the price level and the total quantity of goods and services that firms are willing to produce.

• The relationship between the price level and the total quantity of goods and services that consumers are willing to buy.

• The relationship between the price level and the total quantity of goods and services that the government is willing to produce.

• The relationship between the price level and the total quantity of goods and services that firms are willing to import.

Why does the short-run aggregate supply curve slope upwards?

• Because of increased profitability, sticky wages, capacity utilization, and market entry.

• Because of decreased profitability, sticky wages, capacity utilization, and market entry.

• Because of increased profitability, flexible wages, capacity utilization, and market entry.

• Because of increased profitability, sticky wages, capacity underutilization, and market entry.

What is one of the key reasons for the upward slope of the short-run aggregate supply curve?

• Decreased profitability

• Sticky wages

• Decreased capacity utilization

• Market exit

Which factor does NOT determine the economy's productive capacity in the long run?

• A) Technological progress

• B) Changes in the labor force

• C) Capital accumulation

• D) Short-term price changes

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

• A) Upward sloping

• B) Downward sloping

• C) Vertical

• D) Horizontal

What can lead to an expansion of the economy's productive capacity and shift the long-run aggregate supply curve to the right?

• A) A decrease in the labour force

• B) An increase in the size or quality of the labour force

• C) A reduction in technological progress

• D) A decrease in capital stock

What can advances in technology enhance?

• A) Productivity

• B) Unemployment rates

• C) Inflation

• D) Trade deficits

What can changes in aggregate demand influence?

• A) The position of the aggregate supply curve in both the short run and the long run

• B) Only the short-run aggregate supply curve

• C) Only the long-run aggregate supply curve

• D) Neither the short-run nor the long-run aggregate supply curve

What does the short-run aggregate supply curve indicate?

• A) A negative relationship between the price level and output

• B) A positive relationship between the price level and output

• C) No relationship between the price level and output

• D) A vertical relationship between the price level and output