WorksheetsQuiz on Aggregate Demand
Total questions: 15
Worksheet time: 8mins
Using the diagram with points a and b, what happens when the aggregate price level rises from P0 to P1?
Aggregate output overshoots beyond Q1
Aggregate output stays unchanged at Q0
Aggregate output rises from Q0 to Q1
Aggregate output falls from Q0 to Q1
Which mechanism explains part of the downward slope of aggregate demand by reducing consumption when prices rise?
Menu cost effect increases firm output
Wealth effect lowers purchasing power
Export price effect boosts foreign demand
Interest rate effect cuts borrowing costs
At a constant aggregate price level P0, a rightward shift from AD0 to AD1 implies what happens to aggregate output?
Output fluctuates between Q0 and Q1
Output stays unchanged at Q0
Output increases from Q0 to Q2
Output decreases from Q2 to Q0
A country’s net exports are most likely to increase when which condition holds?
Foreign incomes rise and the home currency depreciates
Foreign incomes fall and the home currency appreciates
Domestic incomes rise and the home currency appreciates
Interest rates rise and the budget deficit widens
Which statement best defines the aggregate supply curve ?
It shows nominal GDP at fixed wage levels
It shows real GDP firms produce at various price levels
It shows government spending across alternative tax rates
It shows planned consumption at different interest rates
A country implements widespread automation and attracts foreign investment. Predict the most likely change to its LRAS and justify the direction of output change.
LRAS stays fixed, output unchanged
SRAS shifts right, prices fall
LRAS shifts left, output falls to Q0
LRAS shifts right, output rises to Q1
Which change is most likely to shift the short-run aggregate supply curve to the right?
Higher payroll taxes on firms
Improved production technology
Increase in nominal wage contracts
Rise in expected future inflation
In the diagram, SRAS shifts from SRAS₀ to SRAS₁, moving equilibrium from point a at Q₀ to point b at Q₁ while price level stays at P₀. What does this shift represent?
Leftward shift caused by input cost rise
Movement along SRAS due to higher prices
Increase in aggregate output at the same price level
Decrease in aggregate output at all prices
Budget
all of the yearly deficits added together
difference between spending and revenue each year
amount of money the government makes per year
a plan for money the government will spend
Long ago, all books were copied by hand. Making new copies was a lot of work and took a long time. But the invention of the printing press made copying books faster and easier. What happened to the overall supply of books after the printing press was invented?
The supply went up.
The supply went down
If the store has 100 packs of toilet paper and 200 people want to buy it, is it a shortage or surplus?
shortage
surplus
