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AGGREGATE SUPPLY & DEMAND

AGGREGATE SUPPLY & DEMAND. MILLIONAIRE STYLE QUIZ. What is shown on the “x axis” for aggregate demand ?. A. QUANTITY . B . NATIONAL OUTPUT. C. Nominal GDP. C. TOTAL DEMAND. What are the components of aggregate demand?. A. CONSUMPTION, INVESTMENT, GOVERNMENT SPENDING AND EXPORTS.

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AGGREGATE SUPPLY & DEMAND

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  1. AGGREGATE SUPPLY & DEMAND MILLIONAIRE STYLE QUIZ

  2. What is shown on the “x axis” for aggregate demand? A. QUANTITY B. NATIONAL OUTPUT C. Nominal GDP C. TOTAL DEMAND

  3. What are the components of aggregate demand? A. CONSUMPTION, INVESTMENT, GOVERNMENT SPENDING AND EXPORTS B. CONSUMPTION, INVESTMENT, GOVERNMENT, SAVINGS AND NET EXPORTS C. CONSUMPTION, INVESTMENT, GOVERNMENT SPENDING AND NET EXPORTS D. CONSUMPTION, INVESTMENT, GOVERNMENT, PRIVATE SECTOR SPENDING AND NET EXPORTS.

  4. Which of the following is a non-durable good? A. LAPTOP B. TOILET ROLL C. CELL PHONE D. PLANE

  5. When firms spend on capital to increase their output this is called: A. REPLACEMENT INVESTMENT B. NATURAL INVESTMENT C. INDUCED INVESTMENT D. CYCLICAL INVESTMENT

  6. In circular flow model buying shares would really represent: A. AN INVESTMENT B. SAVINGS C. AN INJECTION D. A CAPITAL INVESTMENT

  7. What is the formula for aggregate demand? a. C + I + E + D – (X-M) b. C + I + E + (X-M) c. C + I + G + (E) d. C + I + G + (X-M)

  8. Which of the following would not be used on the `x’ axis with an aggregate demand curve? a. National Income b. National Expenditure c. National Output or Real Output d. National Production

  9. If the central banks adopts a contractionary monetary policy this could: A. LEAD TO A FALL IN AD B. LEAD TO AN EXPANSION OF AD C. RESULT IN AN EXPANSIONARY FISCAL POLICY D. LEAD TO AN INCREASE IN PRICES.

  10. An increase in any of the components of aggregate demand will result in: A. A Shift in the aggregate demand curve to the left B. A Shift in the aggregate demand curve to the right C. A movement down the demand curve. D. A movement up the demand curve.

  11. What defines a persons wealth? a. The Income they earn b. The assets they own. c. Their income & assets d. Their gross or net assets

  12. What is another name for a consumer confidence index? a. A consumer feelings index b. A consumer choice index c. A consumer resilience index d. A consumer sentiment index

  13. Which of the following is an example of an indirect tax? A. Income Tax B. Sales Tax on Goods & Services C. Corporate Tax D. Capital Gains Tax

  14. The economy enters a recession. What would be an appropriate response from the Central Bank and Federal Government? a. ADOPT AN EXPANSIONARY FISCAL POLICY AND A CONTRACTIONARY MONETARY POLICY B. ADOPT AN EXPANSIONARY FISCAL POLICY AND ANEXPANSIONARY MONETARY POLICY C. ADOPT A CONTRACTIONARY FISCAL POLICY AND A CONTRACTIONARY MONETARY POLICY D. ADOPT A CONTRACTIONARY FISCAL POLICY AND AN EXPANSIONARY MONETARY POLICY.

  15. What is the current US federal reserve interest rate? A. 0.25% B. 0.50% D. 0.15% C. 0.75%

  16. Economic Institutions Where are the headquarters of the World Bank? A. NEW YORK B. LONDON C. WASHINGTON DC D. CHICAGO

  17. What is aggregate supply? A. THE TOTAL SUPPLY FOR A WHOLE INDUSTRY RATHER THAN A FIRM B. IS THE TOTAL AMOUNT OF GOOD AND SERVICES THAT A BUSINESS WILL SUPPLY AT THE MINIMUM PRICE LEVEL C. IS THE TOTAL AMOUNT OF GOOD AND SERVICES THAT ALL INDUSTRIES IN AN ECONOMY WILL PRODUCE AT A GIVEN PRICE LEVEL D. IS THE TOTAL AMOUNT OF GOOD AND SERVICES THAT ALL INDUSTRIES IN AN ECONOMY WILL PRODUCE AT THE EQUILIBRIUM PRICE.

  18. What does the Short Run Aggregate Supply curve look like? a. It is upward sloping and there is a positive relationship between the price level and the amount of output b. It is downward sloping and there is a negative relationship between the price level and the amount of output c. It is downward sloping and there is a positive relationship between the price level and the amount of output d. It is downward sloping and there is an inverse relationship between the price level and the amount of output

  19. How long is the “short run” when examining aggregate supply? a. About 12 to 18 months b. The period of time when the prices of the factors of production do not change. The wage rate is fixed. c. The period of time when the prices of the factors of production do not change, with the exception of wages, which must reflect market conditions. d. The period of time when all the factors of production change in price and thus there is a new supply curve for the economy.

  20. Leaders in Economics & BusinessWho is the President of European Central Bank? A. FELIPE GONZALEZ B. MARIO DRAGHI C. JACK STRAW D. CHRISTIAN PORTO

  21. What will cause a complete shift in the SRAS? A. Increase in price B. Decrease in price C. A change in any of the factors except price D. A change in any of the factors including price.

  22. What are “supply side” shocks? A. FACTORS THAT CAUSE CHANGES IN THE COST OF PRODUCTION B. FACTORS THAT CAUSE DECREASES IN THE COST OF PRODUCTION C. FACTORS THAT CAUSE AN INCREASE IN THE COST OF PRODUCTION D. ONLY INCREASES IN WAGES

  23. ECONOMIC INSTITUTIONS When was the WTO established? a. JANUARY 1ST 1995 c. JANUARY 1ST 2000 b. JANUARY 1ST 2005 d. JANUARY 1ST 1985

  24. What are the two main schools of thought regarding the Long Run Aggregate Supply Curve (LRAS)? A. THE KEYNESIAN VIEW AND THE ADAM SMITH PERSPECTIVE B. THE KEYNESIAN VIEW AND THE NEO LIBERIAL ECONOMISTS. C. THE KEYNESIAN VIEW AND PROTECTIONIST PERSPECTIVE D. THE KEYNESIAN VIEW AND NEO CLASSICAL OR FREE MARKET ECONOMISTS

  25. During periods of low demand, the Keynesians would argue: A. THAT IS POSSIBLE TO INCREASE THE LEVEL OF OUTPUT WITHOUT INCURRING INCREASING COSTS, BECAUSE OF SPARE CAPACITY IN THE ECONOMY. B. THAT IS NOT POSSIBLE TO INCREASE THE LEVEL OF OUTPUT WITHOUT INCURRING INCREASING COSTS. C. THAT IS POSSIBLE TO INCREASE THE LEVEL OF OUTPUT WITHOUT INCURRING AN INCREASE IN WAGES. D. THAT IS NOT POSSIBLE TO INCREASES OUTPUT, WITHOUT INCREASING COSTS, DUE TO LACK OF SPARE CAPACITY.

  26. When the economy is at full capacity, the relevant abbreviation is: a. Ef b. Cf c. Yf d. FC

  27. Based on this diagram, the LRAS in stage 3 becomes: A. Perfectly Elastic B. Perfectly Inelastic C. Unit Elastic D. Moderately Inelastic

  28. When the economy is at full capacity we also mean the economy has achieved: A. FULL EMPLOYMENT WITH NO UNEMPLOYMENT B. FULL EMPLOYMENT WITH VERY LOW LEVELS OF UNEMPLOYMENT C. LOW LEVELS OF INFLATION AND LOW LEVELS OF UNEMPLOYMENT D. ECONOMIC GROWTH WITHOUT ENTERING A RECESSION

  29. Which of the following statements regarding the neo-classical LRAS curve is correct? a. The LRAS curve is vertical at all price levels, even with very low price levels. b. The LRAS curve is vertical from when the economy reaches moderate levels of economic growth. c. The LRAS curve is perfectly elastic at all price levels. b. The LRAS curve is vertical in stage 1, 2 and 3.

  30. Leaders in Economics & BusinessWho is the President of the World Bank?He is the 12th president of the bank & was appointed on July 1st 2012, for a five year renewable term. a. Kim Long Park b. Jim Yong Kim c. Kim Yong Park d. Kim Wu Park

  31. When modeling aggregate supply & demand the average price level can also be interpreted as the: A. THE CONSUMER PRICE INDEX B. THE WHOLESALE PRICE INDEX A COMPREHENSIVE C. GUAGE / INDICATOR OF THE OVERALL INFLATION RATE D. THE PRODUCER PRICE INDEX

  32. According to the neo-classical school we can only increase income by new…: A. GOVERNMENT SPENDING B. DEMAND SIDE POLICIES C. SUPPLY SIDE POLICIES D. CONSUMERS ENTERING THE MARKET

  33. Improvements in technology and education, will have what impact on the LRAS curve? a. They will shift the curve to the right b. They will shift the curve to the left c. They will shift the curve upward d. They will shift the curve downward

  34. Leaders in Economics & BusinessWho is the US Treasury Secretary? A. Jack Lew B. Timothy Geithner C. Mark Henderson D. Jack Dolton

  35. Which of the following is not a market oriented supply side policy? a. REDUCTION IN INCOME TAX b. A DECREASE IN UNEMPLOYMENT BENEFITS c. DEREGULATION d. MORE SPENDING ON R&D

  36. Economic InstitutionsWhich country joined to make the BRICS on December 24th 2010 a. South Africa b. India c. Brazil d. Indonesia

  37. What does it mean to deregulate the business environment? A. IMPLEMENT MORE FLEXIBLE LABOR LAWS THAT BENEFIT BUSINESS B. REDUCE “RED TAPE” & COSTLY REGULATIONS FOR BUSINESS C. REMOVE ALL GOVERNMENT RESTRICTIONS/RULES/REGULATONS ON BUSINESS OPERATIONS D. MAKE AN INDUSTRY MORE USER FRIENDLY

  38. Which of the following is not an interventionist supply side policy? a. Education & Training b. Provision of Infrastructure c. R&D d. Privatization

  39. Economic Institutions ECONOMIC INSTITUTIONS MERCOSUR IS AN EXAMPLE OF: A. COMMON MARKET B. CUSTOMS UNION C. FREE TRADE AREA D. PREFERENTIAL TRADE ZONE

  40. Which of the following policies would most likely attract a government tax credit? a. Privatization b. Spending on R&D c. Spending on Education & Training d. Spending on technology

  41. Leaders in Economics & BusinessWho is the Managing Director of the International Monetary Fund? She was appointed on the 5th July 2011 a. Christine Hoareau b. Sarah Lagarde c. Christine L’Fante d. Christine Lagarde

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