Aggregate Demand and Supply Theory Quiz
Test your knowledge with 14 questions on Aggregate Demand, Supply, Long-Run & Short-Run Curves, and Macroeconomic Concepts.
#1
What is the definition of Aggregate Demand?
The total demand for goods and services in an economy at a given price level and in a given period
The demand for a specific product or service in an economy
The demand for capital goods in an economy
The demand for consumer goods in an economy
#2
What does the Aggregate Supply curve represent?
The total output of goods and services that firms are willing and able to produce at different price levels
The total demand for goods and services in an economy
The total amount of money in circulation in an economy
The total amount of consumer spending in an economy
#3
Which of the following is a component of Aggregate Demand?
Government expenditure
Imports
Interest rates
Exports
#4
What does the Short-Run Aggregate Supply curve represent?
The total output of goods and services that firms are willing and able to produce at different price levels in the long run
The total output of goods and services that firms are willing and able to produce at different price levels in the short run
The total output of goods and services that firms are willing and able to produce at different levels of government spending
The total output of goods and services that firms are willing and able to produce at different levels of consumer income
#5
Which of the following factors can cause a shift in the Aggregate Demand curve?
Changes in consumer income
Changes in the price level
Changes in technology
Changes in the money supply
#6
Which of the following can cause a shift in the Short-Run Aggregate Supply curve?
Changes in input prices
Changes in consumer preferences
Changes in government spending
Changes in exchange rates
#7
What is the long-run effect of an increase in Aggregate Demand?
An increase in the price level with no change in real GDP
A decrease in the price level with an increase in real GDP
A decrease in both the price level and real GDP
An increase in both the price level and real GDP
#8
Which of the following is an example of a determinant of Aggregate Supply?
Changes in consumer preferences
Changes in technology
Changes in government spending
Changes in consumer income
#9
What effect does an increase in government spending have on Aggregate Demand?
It increases Aggregate Demand
It decreases Aggregate Demand
It has no effect on Aggregate Demand
It decreases the price level but increases real GDP
#10
In the Aggregate Demand and Supply model, what happens if Aggregate Demand exceeds Aggregate Supply?
Inflationary pressures increase
Unemployment decreases
Economic output decreases
Interest rates decrease
#11
What is the concept of potential GDP in the context of Aggregate Supply?
The maximum sustainable level of real GDP that an economy can produce
The total amount of goods and services demanded at full employment
The total output of an economy at equilibrium
The total output of an economy at a given price level
#12
What is the long-run effect of an increase in Aggregate Supply?
An increase in real GDP with no change in the price level
A decrease in real GDP with an increase in the price level
An increase in both real GDP and the price level
A decrease in both real GDP and the price level
#13
What is the main reason for the downward slope of the Long-Run Aggregate Supply curve?
The substitution effect
The income effect
The law of diminishing returns
The increasing opportunity cost
#14
What is the impact of a decrease in Aggregate Supply?
Inflationary pressures decrease
Unemployment decreases
Economic output increases
Interest rates decrease
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