Aggregate Supply Quiz 1 (25 MCQs)

Quiz Instructions:

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1. The three principal sections on the Keynesian LRAS curve

2. Changes in the costs of production cause the short run aggregate supply curve to shift

3. Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate:

4. There are two types of neoclassical aggregate supply curves

5. LRAS is likely to increase if:

6. The pound appreciates in value. The likely effect is:

7. An improvement in the quality of the factors of production and the quantity can shift the long run aggregate supply curve to the right

8. The accelerator effect can be positive or negative.

9. The reasons for why aggregate demand curve might shift to the right

10. A rise in the price level will cause output to fall because domestic consumption will be reduced

11. A rise in the price level will cause output to fall because the demand for exports will be reduced

12. The long run aggregate supply curve assumes all resources are being used to full capacity

13. The short-run aggregate supply curve is upward sloping

14. Improved training of employees would:

15. A rise in GDP might cause an accelerated increase in investment. This is known as the accelerator effect.

16. Which of the following would NOT shift LRAS?

17. The multiplier effect leads to a larger increase in aggregate demand

18. An investment will be more likely if:

19. The price level represents the average price level in the UK, i.e. the consumer price index

20. The SRAS curve can be price inelastic or price elastic, and I recognize the significance of this.

21. The price of oil decreases. This will most likely:

22. Banks can play a part in determining the position of the long run aggregate supply curve through affecting investment

23. The outward shift of the AS curve means that at any given price level, more output can be produced

24. A rise in the price level will cause output to fall because the demand for imports will increase

25. A sizable decrease in the price of oil is an example of a