Quiz on Aggregate Supply and Demand

What factors influence the quantity of real GDP supplied?

• Labor employed, Capital, Human capital, State of technology

• Consumption expenditure, Investment, Government expenditure, Net exports

• Real interest rate, Wealth, Expected future income

• Disposable income, Net taxes, Transfer payments

What happens to the quantity of real GDP supplied when the price level rises, assuming other factors remain constant?

• It decreases

• It remains unchanged

• It increases

• It fluctuates randomly

Which of the following factors can cause a change in aggregate demand?

• Changes in the money wage rate

• Changes in potential GDP

• Changes in fiscal policy and monetary policy

• Changes in the money prices of other resources

What is the effect of a rise in the price level on the real interest rate and aggregate demand?

• Real interest rate falls, aggregate demand increases

• Real interest rate rises, aggregate demand decreases

• Real interest rate remains unchanged, aggregate demand increases

• Real interest rate rises, aggregate demand increases

What is a recessionary gap?

• When real GDP exceeds potential GDP, leading to a rising price level

• When potential GDP exceeds real GDP, leading to a falling price level

• When real GDP equals potential GDP, leading to stable prices

• When the money wage rate is constant, leading to unchanged real GDP