WorksheetsIB Econs
Total questions: 30
Worksheet time: 2hrs 30mins
Name
Class
Date
1.
1. In the monetarist/new classical view, the long-run aggregate supply (LRAS) curve is:
a)
Horizontal
b)
Vertical
c)
Upward-sloping
d)
Downward-sloping
2.
2. The Keynesian AS curve is divided into how many distinct sections?
a)
1
b)
2
c)
3
d)
4
3.
3. An inflationary gap occurs when:
a)
Real GDP < Potential GDP
b)
Real GDP = Potential GDP
c)
Real GDP > Potential GDP
d)
Unemployment is high
4.
4. In the horizontal section of the Keynesian AS curve, aggregate supply is:
a)
Perfectly price inelastic
b)
Relatively price elastic
c)
Perfectly price elastic
d)
Unitary elastic
5.
5. Which factor shifts the LRAS curve to the right?
a)
A rise in consumer spending
b)
Technological advancements
c)
A decrease in interest rates
d)
Higher government subsidies
6.
6. The vertical LRAS curve in the monetarist model implies that long-run output depends on:
a)
The price level
b)
Non-price factors (e.g., technology)
c)
Aggregate demand
d)
Government policies
7.
7. A deflationary gap is most likely caused by:
a)
Excessive aggregate demand
b)
A leftward shift in SRAS
c)
A fall in aggregate demand
d)
An increase in LRAS
8.
8. In the Keynesian view, the economy may not reach full employment in the long run due to:
a)
Price rigidity
b)
Flexible wages
c)
Self-correcting markets
d)
Spare capacity
9.
9. If the economy operates in the vertical section of the Keynesian AS curve, an increase in AD will result in:
a)
Higher output and inflation
b)
Higher output only
c)
Inflation only
d)
Lower output
10.
10. The monetarist LRAS curve is vertical because:
a)
Prices are sticky
b)
Output is at full employment
c)
There is spare capacity
d)
AD determines output
11.
11. Which institutional change could increase LRAS?
a)
A tax cut
b)
Improved education systems
c)
Lower interest rates
d)
Higher export demand
12.
12. In the upward-sloping section of the Keynesian AS curve, an increase in AD causes:
a)
No price change
b)
Rising prices and output
c)
Falling prices
d)
Output to decrease
13.
13. A rightward shift in LRAS (monetarist view) leads to:
a)
Higher price level
b)
Lower price level and higher output
c)
No change in output
d)
Inflation
14.
14. Short-run macroeconomic equilibrium occurs where:
a)
AD = LRAS
b)
AD = SRAS
c)
SRAS = LRAS
d)
AD intersects both SRAS and LRAS
15.
15. Which is a cause of a deflationary gap?
a)
Rising consumer confidence
b)
Falling investment
c)
Technological progress
d)
Increased government spending
16.
16. The Keynesian AS curve becomes vertical when:
a)
There is high unemployment
b)
All resources are fully employed
c)
AD is low
d)
Prices are flexible
17.
17. In the monetarist view, an increase in AD beyond Yf</sub> causes:
a)
Higher output
b)
Inflation only
c)
Lower prices
d)
Unemployment
18.
18. Which factor increases efficiency and shifts LRAS?
a)
Wage increases
b)
Research and development (R&D)
c)
Higher taxes
d)
Lower savings
19.
19. In Figure 17.6 (monetarist LRAS), a shift from AD1</sub> to AD2</sub> results in:
a)
Higher Yf</sub>
b)
Higher PL only
c)
Higher Y and PL
d)
No change in Y
20.
20. The Keynesian view argues that long-run equilibrium:
a)
Always reaches Yf</sub>
b)
May not reach Yf</sub>
c)
Depends on AD only
d)
Is identical to monetarist LRAS
21.
21. A rise in SRAS (Figure 17.13) causes:
a)
Lower PL and higher Y
b)
Higher PL and lower Y
c)
No change in PL
d)
Lower Y only
22.
22. Which is NOT a determinant of LRAS?
a)
Quantity of labor
b)
Price level
c)
Technology
d)
Institutional quality
23.
23. In the horizontal Keynesian AS section, a rise in AD increases:
a)
PL only
b)
Y only
c)
Both PL and Y
d)
Neither PL nor Y
24.
24. A prolonged recession (e.g., Japan 1995–2007) supports which view?
a)
Monetarist
b)
Keynesian
c)
Both
d)
Neither
25.
25. The LRAS curve shifts left if:
a)
Technology regresses
b)
Education improves
c)
Efficiency rises
d)
Institutions strengthen
26.
26. In Figure 17.10, a rightward Keynesian AS shift implies:
a)
Lower PL and higher Y
b)
Higher PL and Y
c)
Only higher PL
d)
Only lower PL
27.
27. Which is a supply-side policy?
a)
Increasing government spending
b)
Cutting income taxes
c)
Investing in infrastructure
d)
Raising interest rates
28.
28. The vertical LRAS curve means monetary policy only affects:
a)
Output
b)
Prices
c)
Both output and prices
d)
Neither
29.
29. In the Keynesian model, inflationary gaps are closed by:
a)
Market forces
b)
Government intervention
c)
Both
d)
Neither
30.
30. If SRAS is price inelastic, an AD increase causes:
a)
Larger Y increase
b)
Larger PL increase
c)
No PL change
d)
Y decrease
100 %
