Aggregate Supply And Aggregate Demand - Practice Quiz

10 Questions | Total Attempts: 646

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Aggregate Supply And Aggregate Demand - Practice Quiz

The AD-AS curves may be a little confusing to some student especially when it comes to the effect of changes in the demand or supply a person makes. The quiz below is designed to help you perfect your understanding on the topic. Give it a try and remember to keep studying.


Questions and Answers
  • 1. 
    Aggregate supply depends on all of the following factors except 
    • A. 

      The quantity of labor.

    • B. 

      The state of technology.

    • C. 

      The quantity of capital.

    • D. 

      Price level.

  • 2. 
    In the short run, which of the following factors is not fixed? 
    • A. 

      State of technology

    • B. 

      Labor

    • C. 

      Capital

    • D. 

      Price level

  • 3. 
    In the long run, 
    • A. 

      Aggregate demand is vertical.

    • B. 

      Price level is fixed.

    • C. 

      Real GDP equals potential GDP

    • D. 

      Unemployment increases.

  • 4. 
    A change in any of the following factors could cause the aggregate demand curve to shift except 
    • A. 

      Monetary policy.

    • B. 

      Price level.

    • C. 

      Fiscal policy.

    • D. 

      Expectations.

  • 5. 
    The short-run aggregate supply curve assumes that all of the following remain constant except 
    • A. 

      Unemployment rate.

    • B. 

      Potential GDP.

    • C. 

      Prices of other resources.

    • D. 

      Money wage rate.

  • 6. 
    When the price level rises but the money wage rate and other resource prices remain the same, then the 
    • A. 

      Quantity of real GDP supplied increases and there is a rightward shift in the short-run aggregate supply curve.

    • B. 

      Quantity of real GDP supplied decreases and there is a leftward shift in the short-run aggregate supply curve.

    • C. 

      Quantity of real GDP supplied decreases and there is a movement along the short-run aggregate supply curve.

    • D. 

      Quantity of real GDP supplied increases and there is a movement along the short-run aggregate supply curve.

  • 7. 
    If the price level rises, then 
    • A. 

      Real wealth decreases, consumption increases, and aggregate demand increases.

    • B. 

      Real wealth decreases, consumption decreases, and aggregate demand decreases.

    • C. 

      Real wealth increases, consumption decreases, and aggregate demand decreases.

    • D. 

      Real wealth increases, consumption increases, and aggregate demand increases.

  • 8. 
    Aggregate income minus taxes plus transfer payments is equal to 
    • A. 

      Disposable income.

    • B. 

      Wealth.

    • C. 

      Saving.

    • D. 

      Consumption.

  • 9. 
    A recessionary gap is the amount by which 
    • A. 

      Real GDP exceeds potential GDP.

    • B. 

      Nominal GDP exceeds potential GDP.

    • C. 

      Potential GDP exceeds real GDP.

    • D. 

      Potential GDP exceeds nominal GDP.

  • 10. 
    When the economy experiences a combination of recession and inflation, the situation is called
    • A. 

      Recessionary gap.

    • B. 

      Stagflation.

    • C. 

      Inflationary gap.

    • D. 

      Hyperinflation.

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