Economics - The Aggregate Demand Aggregate Supply Model
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This is The MCQs of Economics
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Question 1 of 20
1. Question
Which of the following statements about economic fluctuations is true?
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Question 2 of 20
2. Question
According to the interest rate effect aggregate demand slopes downward (negatively) because:
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Question 3 of 20
3. Question
Which of the following would not cause a shift in the long-run aggregate supply curve?
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Question 4 of 20
4. Question
Which of the following is not a reason why the aggregate demand curve slopes downward?
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Question 5 of 20
5. Question
In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to:
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Question 6 of 20
6. Question
Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply cruve
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Question 7 of 20
7. Question
According to the wealth effect aggregate demand slopes downward (negatively) because
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Question 8 of 20
8. Question
The natural rate of output is the amount of real GDP produced:
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Question 9 of 20
9. Question
Suppose the price level falls but because of fixed nominal wage contracts the real wage rises and firms cut back on production This is a demonstration of the
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Question 10 of 20
10. Question
Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the
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Question 11 of 20
11. Question
Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run?
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Question 12 of 20
12. Question
Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run?
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Question 13 of 20
13. Question
Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run?
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Question 14 of 20
14. Question
Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run?
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Question 15 of 20
15. Question
Stagflation occurs when the economy experiences:
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Question 16 of 20
16. Question
Which of the following events shifts the short run aggregate supply curve to the right?
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Question 17 of 20
17. Question
Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers wished to move output to its long run natural rate they should attempt to:
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Question 18 of 20
18. Question
Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own,
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Question 19 of 20
19. Question
According to the model of aggregate supply and aggregate demand in the long run an increase in the money supply should cause:
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Question 20 of 20
20. Question
Policy makers are said to “accommodate” an adverse supply shock if they
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