Macroeconomics Quiz

What does the AD-AS model primarily analyze?

• The relationship between supply and demand

• Equilibrium price in individual markets

• National income determination and price level dynamics

• The effects of government policies on individual firms

In the AD-AS model, what does the vertical axis represent?

• National income

• General price level

• Investment expenditure

• Quantity of goods produced

What happens to the AD curve when consumption expenditure increases?

• It becomes vertical

• It remains unchanged

• It shifts to the right

• It shifts to the left

Which of the following factors can cause a rightward shift in the AD curve?

• Decrease in consumer confidence

• Increase in net exports

• Increase in interest rates

• Decrease in government expenditure

What is the shape of the Aggregate Demand (AD) curve?

• Upward sloping

• Downward sloping

• Horizontal

• Vertical

What does a leftward shift of the AD curve indicate?

• Increase in aggregate demand

• Increase in general price level

• Decrease in aggregate demand

• No change in aggregate demand

Which of the following is NOT a component of Aggregate Demand?

• Consumption expenditure

• Investment expenditure

• Government expenditure

• Savings

What is the effect of a rise in interest rates on investment expenditure?

• It increases investment expenditure

• It decreases investment expenditure

• It has no effect on investment expenditure

• It only affects government investment

What does the term 'net exports' refer to?

• Total domestic production

• Total foreign investment

• Total imports minus total exports

• Total exports minus total imports

Which of the following factors can lead to a decrease in aggregate supply?

• Increase in input prices

• Government subsidies

• Increase in labor force

• Technological advancements