Aggregate Supply And Aggregate Demand - Practice Quiz

10 Questions | By Dwessler | Last updated: Mar 21, 2022 | Total Attempts: 1112

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Aggregate Supply And Aggregate Demand - Practice Quiz - 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.