CIE AS Macroeconomics

Which of the following best describes Aggregate Demand (AD)?

• The total supply of goods and services in an economy at a given overall price level and in a given time period.

• The total demand for goods and services within a particular market.

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

• The total amount of money in circulation in an economy.

Which of the following is a tool of monetary policy?

• Government spending

• Taxation

• Open market operations

• Subsidies

What is the primary effect of expansionary fiscal policy?

• Increase in unemployment

• Decrease in aggregate demand

• Increase in aggregate demand

• Decrease in inflation

Which of the following is a method to measure inflation?

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Unemployment Rate

• Balance of Payments

Which type of unemployment is caused by technological advancements?

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

Which of the following is an indicator of economic growth?

• Inflation rate

• Unemployment rate

• Gross Domestic Product (GDP)

• Interest rate

What happens to the aggregate supply curve in the short run when production costs decrease?

• It shifts to the left.

• It shifts to the right.

• It becomes vertical.

• It becomes horizontal.

Which of the following is NOT a tool of monetary policy?

• Discount rate

• Reserve requirements

• Government spending

• Open market operations

What is the main goal of contractionary fiscal policy?

• Increase inflation

• Reduce inflation

• Increase unemployment

• Increase government debt

Which of the following measures the average change in prices over time that consumers pay for a basket of goods and services?

• Producer Price Index (PPI)

• Consumer Price Index (CPI)

• Gross Domestic Product (GDP)

• Retail Price Index (RPI)