5 Questions
What are the shifters of Aggregate Demand (AD)?
Consumer spending, Investment spending, Government spending, Net exports
What is the cause of Demand-Pull Inflation?
AD increases faster than AS, leading to higher prices and output
What is the primary tool of Monetary Policy?
Manipulating the money supply and interest rates
What is the recommended fiscal approach during a period of inflation?
Decrease government spending or increase taxes
What are the impacts of Covid-19 on inflation according to the text?
Shift in AD due to changes in consumer behavior, government interventions, and business closures
Test your understanding of aggregate demand and aggregate supply with this quiz. Identify the shifters of both AD and AS, and learn about their impacts on equilibrium GDP, including demand-pull inflation.
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