#1
Which of the following is a component of aggregate demand?
Government spending
Foreign exchange reserves
National debt
Income taxes
#2
What is the relationship between the price level and aggregate demand?
Inverse relationship
Direct relationship
No relationship
Cyclical relationship
#3
Which of the following is a component of aggregate supply?
Interest rates
Consumer spending
Technology
Government subsidies
#4
What does the short-run aggregate supply curve show?
The relationship between real GDP and the price level in the short run, holding all other factors constant.
The relationship between real GDP and the price level in the long run, holding all other factors constant.
The relationship between unemployment and inflation in the short run.
The relationship between consumer spending and investment in the economy.
#5
In the long run, the aggregate supply curve is:
Vertical
Horizontal
Positively sloped
Negatively sloped
#6
Which of the following is a determinant of aggregate supply?
Government spending
Technological advancements
Consumer preferences
Foreign exchange rates
#7
Which of the following is a shift factor of aggregate demand?
Changes in the price level
Changes in consumer expectations
Changes in wage rates
Changes in technology
#8
What is the slope of the aggregate demand curve?
Positive
Negative
Vertical
Horizontal
#9
Which of the following would cause a rightward shift of the aggregate supply curve?
A decrease in wages
An increase in taxes
A decrease in government spending
A technological innovation
#10
What effect does a decrease in consumer confidence have on aggregate demand?
Increases aggregate demand
Decreases aggregate demand
No effect on aggregate demand
Shifts the aggregate supply curve
#11
Which of the following is an example of a supply-side policy?
Increasing government spending on infrastructure
Reducing income taxes
Increasing unemployment benefits
Implementing price controls
#12
What does the Phillips curve illustrate?
The relationship between inflation and unemployment
The relationship between government spending and economic growth
The relationship between interest rates and investment
The relationship between aggregate demand and aggregate supply
#13
Which of the following scenarios is an example of demand-pull inflation?
A decrease in aggregate demand and a decrease in price level
An increase in aggregate supply and an increase in price level
An increase in aggregate demand and an increase in price level
A decrease in aggregate supply and an increase in price level
#14
What is the multiplier effect?
The effect of a change in interest rates on investment
The effect of government spending on aggregate demand
The effect of a change in consumption on aggregate supply
The effect of an initial change in spending on total income
#15
What is the effect of an increase in the money supply on aggregate demand?
Increases aggregate demand
Decreases aggregate demand
No effect on aggregate demand
Shifts the aggregate supply curve
#16
What happens to equilibrium output and price level if aggregate demand increases while aggregate supply remains constant?
Output increases, and the price level increases.
Output decreases, and the price level decreases.
Output decreases, and the price level increases.
Output increases, and the price level decreases.
#17
What is the primary determinant of long-run economic growth?
Aggregate demand
Aggregate supply
Government spending
Technological progress
#18
Which of the following factors would cause the short-run aggregate supply curve to shift to the left?
An increase in productivity
An increase in the labor force
An increase in the price level
An increase in business taxes
#19
What is the relationship between inflation and the long-run aggregate supply curve?
Positive relationship
Negative relationship
No relationship
Inverse relationship
#20
What is the main cause of stagflation?
A decrease in aggregate demand
An increase in aggregate demand
A decrease in aggregate supply
An increase in aggregate supply
#21
What is the equation of the aggregate demand curve in the Keynesian cross model?
Y = C + I + G + NX
Y = C + S + T
AD = C + I + G + (X - M)
AD = C + S + T + (X - M)
#22
Which of the following factors is likely to cause a leftward shift of the long-run aggregate supply curve?
Technological advancements
Increase in labor force participation
Decrease in government regulation
Increase in institutional quality
#23
What is the significance of the natural rate of unemployment in the context of aggregate supply?
It represents the level of unemployment at which inflation is stable.
It indicates the maximum level of output an economy can sustainably produce.
It reflects the level of unemployment that exists when an economy is at full employment.
It represents the level of unemployment caused by cyclical factors.
#24
Which of the following is a supply-side policy aimed at increasing long-run aggregate supply?
Expansionary fiscal policy
Contractionary monetary policy
Investment in education and training
Increasing transfer payments
#25
What is the difference between real GDP and potential GDP?
Real GDP is always higher than potential GDP.
Potential GDP represents the maximum sustainable output an economy can produce, while real GDP reflects actual output.
Potential GDP is adjusted for inflation, while real GDP is not.
Real GDP includes only domestically produced goods and services, while potential GDP includes imports.