Title: Shifts in aggregate supply and aggregate demand
Course: TEST Course

Q: Events that can cause a shift in the aggregate demand might include
- production inputs.
- technological innovation.
- loss of consumer confidence.
A: loss of consumer confidence.

Q: What might shift aggregate demand?
- Production inputs.
- Technological innovation.
- Loss of business confidence.
A: Loss of business confidence.

Q: One benefit to falling aggregate demand is that
- unemployment falls.
- unions lose clout.
- price levels go down.
A: price levels go down.

Q: An increase in aggregate demand would cause
- unemployment to rise.
- foreign investment to rise.
- the price levels to rise.
A: the price levels to rise.

Q: Typically, if consumer and business confidence is high then ________ and if consumer and business confidence is low then ________.
- AD shifts to the left; AD shifts to the right
- AD does not shift; AD shifts to the right
- AD shifts to the right; AD shifts to the left
A: AD shifts to the right; AD shifts to the left

Q: Typically, if consumer and business confidence is low then ________ and if consumer and business confidence is high then ________.
- AD shifts to the right; AD shifts to the left
- AD does not shift; AD shifts to the right
- AD shifts to the left; AD shifts to the right
A: AD shifts to the left; AD shifts to the right

Q: Which of the following would cause a negative demand shock (shift to the left) in aggregate demand?
- increased government spending
- production costs falling
- decreased availability of business capital
A: decreased availability of business capital

Q: Which of the following would cause a positive demand shock (shift to the right) in aggregate demand?
- decreased availability of capital stock.
- availability of social capital increasing.
- increased consumer confidence and spending.
A: increased consumer confidence and spending.

Q: If the government saw that consumer confidence was low, what step can it take to shift the AD to the right?
- The Federal Reserve can increase interest rates.
- Government can decrease its spending.
- Congress can pass tax cuts.
A: Congress can pass tax cuts.

Q: If the government saw that consumer confidence was high, what step can it take to shift the AD to the left?
- Congress can pass tax cuts.
- Government can increase its spending.
- The Federal Reserve can increase interest rates.
A: The Federal Reserve can increase interest rates.

Q: In the 1970s, the price of oil was extremely high. This shock caused a
- change in the slope of the aggregate supply curve.
- shift to the left in the aggregate demand curve.
- shift to the left in the aggregate supply curve.
A: shift to the left in the aggregate supply curve.

Q: During the winter of 2014/2015 oil prices dropped by a large percentage compared to the summer of 2014. By March 2015, what changed?
- There was a shift to the right in the aggregate demand curve.
- There was a shift to the left in the aggregate demand curve.
- There was a shift to the right in the aggregate supply curve.
A: There was a shift to the right in the aggregate supply curve.

Q: In the chart below concerning the shifts in aggregate supply, arrow A represents an economy that is moving in response to ________
- an decrease in input prices
- a decrease in consumer confidence
- a decrease in productivity
A: a decrease in productivity

Q: In the chart below concerning the shifts in aggregate supply, arrow B represents an economy that is moving in response to ________
- a decrease in productivity
- a decrease in consumer confidence
- an decrease in input prices
A: an decrease in input prices

Q: Aggregate supply (AS) denotes, while holding the price of inputs fixed, the ________ that firms choose to produce and ________.
- type of goods: the input price of raw materials
- total inputs: what types of goods
- price level for output; GDP
A: price level for output; GDP

Q: The term "full employment GDP" is synonymous with which of the following?
- aggregate GDP
- macroeconomic equilibrium
- potential GDP
A: potential GDP

Q: The maximum quantity that an economy can produce, given its existing levels of labor, physical capital, technology, and institutions, is called
- real GDP.
- aggregate supply.
- potential GDP.
A: potential GDP.

Q: In the long run, the most important factor that shifts the aggregate supply curve is
- inflation.
- business confidence.
- technological change.
A: technological change.

Q: In the long run, the least important cause of shifts the aggregate supply curve is
- technological change.
- change in productivity.
- change in consumer spending.
A: change in consumer spending.