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WorksheetsAggregate demand & aggregate supply
Total questions: 10
Worksheet time: 8mins
Name
Class
Date
1.
What does the vertical axis represent on the aggregate demand curve?
a)
Total Input
b)
Total Output
c)
Price Level
d)
Both A&B
2.
Which of the following is not a determinant of aggregate demand ?
a)
Change in Consumer Spending
b)
Change in Political Parties
c)
Change in Government Spending
d)
Change in investment Spending
3.
The foreign purchases effect suggests that a decrease in Canada's price level relative to other countries will:
a)
shift the aggregate demand curve leftward.
b)
shift the aggregate supply curve leftward.
c)
decrease Canada's exports and increase Canada's imports.
d)
increase Canada's exports and decrease Canada's imports.
4.
The aggregate supply curve (short-run) slopes upward and to the right because:
a)
changes in wages and other resource prices completely offset changes in the price level.
b)
the price level is flexible upward but inflexible downward.
c)
supply creates its own demand.
d)
wages and other resource prices adjust only slowly to changes in the price level.
5.
Refer to the above diagram. If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be:
a)
F and C, respectively.
b)
G and B, respectively.
c)
F and A, respectively.
d)
E and B, respectively.
6.
The intersection of the aggregate demand and aggregate supply curve occurs at the economy’s equilibrium level of
a)
Nominal investment and the interest rate
b)
Government taxes and employment
c)
Real disposable income and unemployment
d)
Real domestic output and the price level
7.
If exports from the United States increased, what would most likely happen to real gross domestic product and price level?
Real GDP / Price Level
Real GDP / Price Level
a)
decrease/decrease
b)
increase/increase
c)
decrease/increase
d)
increase/no chanve
8.
A major advantage of automatic stabilizers in fiscal policy is that they
a)
reduce private debt
b)
go into effect w/o passage of new legislation
c)
they require a balanced budget
d)
keep unemployment at zero percent
9.
If, at full employment, the government wants to increase its spending by $200 billion without increasing inflation in the short run, it must do which of the following?
a)
raise taxes by more than $200 billion
b)
raise taxes by less than $200
c)
lower taxes by $200 billion
d)
decrease the budget deficit
10.
According to Keynesian analysis, if government expenditures and taxes are increased by the same amount, which of the following will occur?
a)
AS will decrease
b)
AS will increase
c)
AD will increase
d)
unemployment will increase
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