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Understanding Aggregate Supply and Demand

Understanding Aggregate Supply and Demand

Assessment

Interactive Video

Business

11th - 12th Grade

Practice Problem

Hard

Created by

Jennifer Brown

FREE Resource

5 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to the economy when there is an increase in aggregate demand?

The economy remains unchanged.

The economy moves from short run to long run equilibrium.

The economy experiences a recessionary gap.

The economy moves from long run to short run equilibrium.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does an inflationary gap affect wages in the long run?

Wages increase, causing aggregate supply to decrease.

Wages have no effect on aggregate supply.

Wages remain constant, keeping aggregate supply stable.

Wages decrease, leading to an increase in aggregate supply.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the result of higher wages on aggregate supply?

Aggregate supply shifts to the left.

Aggregate supply becomes more elastic.

Aggregate supply shifts to the right.

Aggregate supply remains unchanged.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In a recessionary gap, what is the classical economists' view on government intervention?

They suggest increasing taxes to reduce demand.

They advocate for immediate wage cuts.

They believe the market will self-correct without intervention.

They support government spending to boost demand.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

According to Keynesian economists, what should be done during high unemployment?

Allow the market to self-correct.

Focus on reducing inflation.

Wait for wages to naturally decrease.

Increase aggregate demand through government intervention.

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