3.5 & 3.6 - Equilibrium and Changes in the AS-AD Model

3.5 & 3.6 - Equilibrium and Changes in the AS-AD Model

Assessment

Assessment

Created by

Melinda Unger

Social Studies

9th - 12th Grade

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Hard

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10 questions

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1.

Multiple Choice

1 min

1 pt

When an economy is in equilibrium at potential gross domestic product, the actual unemployment rate is

equal to the cyclical rate

greater than the natural rate

less than the natural rate

equal to the natural rate

equal to zero

2.

Multiple Choice

1 min

1 pt

The intersection of the aggregate supply curve and the aggregate demand curve occurs at the economy's equilibrium level of

real investment and the interest rate

real disposable income and unemployment

real national output and the price level

government expenditures and taxes

imports and exports

3.

Multiple Choice

1 min

1 pt

In the AD−AS model, which of the following is true?

The economy is in an inflationary gap when the short-run equilibrium real output is below the long-run equilibrium real output.

The economy is in an inflationary gap when the short-run equilibrium real output is at the long-run equilibrium real output.

The economy is in a recessionary gap when the short-run equilibrium real output is at the long-run equilibrium real output.

The economy is in a recessionary gap when the short-run equilibrium real output is below the long-run equilibrium real output.

The economy is in a recessionary gap when the short-run equilibrium real output is above the long-run equilibrium real output.

4.

Multiple Choice

2 mins

1 pt

Media Image

The diagram above shows a nation’s short-run aggregate supply curve (SRAS), long-run aggregate supply curve (LRAS), and aggregate demand curve (AD).


Based on the diagram above, which of the following describes the short-run equilibrium?

The economy is operating at full employment.

The economy is operating below full employment.

The economy is operating above full employment.

There will be downward pressure on the price level.

There is a recessionary gap.

5.

Multiple Choice

2 mins

1 pt

Media Image

Given the graph of the short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves above, which of the following is true?

At point Z, the economy has cyclical unemployment.

At point Z, the economy is in long-run equilibrium but not in short-run equilibrium.

At point Y, the natural rate of unemployment is zero.

At point X, the economy is experiencing a recessionary gap.

At point X, there is no frictional unemployment.

6.

Multiple Choice

1 min

1 pt

With an upward-sloping short-run aggregate supply curve, an increase in government expenditure will most likely

reduce the price level

reduce the level of nominal gross domestic product

increase real gross domestic product

shift the short-run aggregate supply curve to the right

shift both the aggregate demand curve and the long-run aggregate supply curve to the left

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