10 Questions
A sudden discovery of a large oil reserve would decrease the supply of natural resources.
False
Investment in infrastructure projects can lead to a decrease in aggregate supply.
False
Technological advancements and changes in production processes have no impact on aggregate supply.
False
At the peak of the business cycle, economic indicators show signs of leveling off or slowing down.
True
A disruption in the supply chain due to a technological failure would lead to an increase in productivity.
False
Increased regulations on businesses can raise production costs and discourage investment, leading to a decrease in aggregate supply.
True
During the expansion phase of the business cycle, economic activity is decreasing.
False
Adoption of automation and robotics in manufacturing can lead to lower production costs.
True
Peak in the business cycle marks the transition from contraction to expansion.
False
Increased taxes on businesses can lead to a decrease in production costs.
False
Learn about the Wealth Effect and Interest Rate Effect, and how they impact consumer spending and investment decisions in response to changes in prices.This quiz discusses how inflation affects aggregate demand through these two mechanisms.
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