AD and AS Quiz

What is Aggregate Demand (AD)?

• The total amount of money in an economy
• The total demand for all goods and services in an economy
• The supply of goods from other countries
• The amount of taxes collected by the government

Which of these best describes the Real Wealth Effect?

• When prices go up, people feel poorer
• When prices go down, people spend less
• When prices rise, people save more money
• When prices fall, people feel richer and spend more

What is the Net Export Effect?

• When a country only imports goods
• When exports are greater than imports
• How price changes affect international trade
• When imports are banned

The Interest Rate Effect means:

• Banks always charge high interest
• Lower prices lead to lower interest rates and more borrowing
• Higher prices mean more saving
• Interest rates never change

What does SRAS stand for?

• Strong Real Aggregate Supply
• Short-Run Aggregate Supply
• Simple Resource Allocation System
• Supply Rate Analysis System

LRAS refers to:

• Long-Run Aggregate Supply
• Limited Resource Allocation Supply
• Large Rate Aggregate System
• Local Resource Analysis Supply

An Inflationary Gap occurs when:

• Prices are too low
• The economy produces less than expected
• The economy produces more than its normal capacity
• There is no economic growth

A Recessionary Gap happens when:

• The economy produces less than it could
• Prices rise too quickly
• Everyone has too much money
• Banks stop lending money

In economics, what does "C" represent?

• Capital
• Consumer spending
• Currency
• Cost of living

The letter "G" in economics usually means:

• Gross income
• Global trade
• Government spending
• Growth rate