Aggregate Supply Quiz

Using the figure above, we can safely conclude that:

• an increase in the price level is responsible for pushing SRAS curve to the right.

• a decrease in the price level is responsible for pushing SRAS curve to the right.

• there has been an increase in SRAS.

• there has been a decrease in SRAS.

• an increase in the price level has caused an upward movement along SRAS curve.

A decrease in energy prices will:

• increase aggregate demand.

• decrease the quantity of aggregate output supplied in the short run.

• decrease aggregate demand.

• increase the quantity of aggregate output demanded.

• increase short-run aggregate supply.

Which is the best description of the shape of the short-run aggregate supply curve?

• Upward-sloping

• Downward- sloping

• Horizontal

• Vertical

• U-shaped

If nominal wages fall, then short-run aggregate:

• supply shifts to the right.

• supply shifts to the left.

• supply becomes vertical.

The variables on the vertical and horizontal axes of the aggregate demand and supply graph are

• the price level, real output.

• real output, employment.

• employment, the inflation rate.

• the value of money, the price level.

Consumption in the economy depends on all these factors EXCEPT.

• Corporate Taxes

• Consumer Confidence

• Income Tax

• Interest Rates

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 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

Based on the scenario which curve represents the correct shift in aggregate supply? Foreign steel (a majority commodity used in production) decreases in price.

• AS1

• AS2

• AS3

Based on the scenario which curve represents the correct shift in aggregate supply? Union dockworkers go on strike across the country.

• AS1

• AS2

• AS3