This quiz works best with JavaScript enabled. Home > Macroeconomics > Aggregate > Aggregate Supply – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Aggregate Supply Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Shows the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy A) Aggregated Supply. B) Aggregated Demand. C) Budget. D) Labor force. Show Answer Correct Answer: A) Aggregated Supply. 2. The multiplier effect leads to a larger increase in aggregate demand A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 3. An investment will be more likely if: A) If the interest rates are high. B) If interest rates are low. C) Confidence in the market is low. D) The economy is operating with excess capacity. Show Answer Correct Answer: B) If interest rates are low. 4. The price level represents the average price level in the UK, i.e. the consumer price index A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 5. Real GDP divided by population size A) GDP. B) Real GDP. C) Real GDP per Capita. D) Nominal GDP. Show Answer Correct Answer: C) Real GDP per Capita. 6. The SRAS curve can be price inelastic or price elastic, and I recognize the significance of this. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 7. The price of oil decreases. This will most likely: A) Cause an increase in AD. B) Cause AS to contract. C) Cause AS to shift to the left. D) Cause AS to shift to the right. Show Answer Correct Answer: D) Cause AS to shift to the right. 8. Banks can play a part in determining the position of the long run aggregate supply curve through affecting investment A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 9. The outward shift of the AS curve means that at any given price level, more output can be produced A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 10. A rise in the price level will cause output to fall because the demand for imports will increase A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 11. A sizable decrease in the price of oil is an example of a A) Supply shock. B) Stagflation. C) Stagnation. D) Demand shock. Show Answer Correct Answer: A) Supply shock. 12. People who are actively looking for a job but aren't employed A) Underemployed. B) Labor Force. C) Unemployed. D) CPI. Show Answer Correct Answer: C) Unemployed. 13. The LRAS curve relates strongly to the production possibility frontier. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 14. The current base rate of interest is A) 1%. B) 0.5%. C) 0.1%. D) 0%. Show Answer Correct Answer: C) 0.1%. 15. Labour is a derived demand and so aggregate demand will have an effect on the aggregate demand for labour and thus unemployment A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 16. Which one of the following is a fundamental determinant of long-run aggregate supply? A) The multiplier. B) The output gap. C) Real national output. D) The institutional structure of the economy. Show Answer Correct Answer: D) The institutional structure of the economy. 17. Investment in technology will improve efficiency:this has a short-run effect on aggregate demand and a long-run effect on aggregate supply A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 18. The Keynesian long run aggregate supply Curve is L-shaped A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 19. The total amount of goods and services produced throughout the economy A) Aggregate Demand. B) Inflation. C) Deflation. D) Aggregate Supply. Show Answer Correct Answer: D) Aggregate Supply. 20. The long run aggregate supply curve is vertical A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. ← PreviousNext →Related QuizzesMacroeconomics QuizzesAggregate Supply Quiz 1Aggregate Supply Quiz 3Aggregate Demand Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books