Podcast
Questions and Answers
What happens to the overall demand within the economy when firms are optimistic?
What happens to the overall demand within the economy when firms are optimistic?
- It remains unchanged
- It decreases
- It becomes unstable
- It increases (correct)
What is the short-run effect of an increase in aggregate demand?
What is the short-run effect of an increase in aggregate demand?
- Prices increase; Output decreases
- Prices increase; Output increases (correct)
- Prices decrease; Output increases
- Prices decrease; Output decreases
What does not influence the Natural Rate of Output or LRAS?
What does not influence the Natural Rate of Output or LRAS?
- Labour
- Capital
- Price changes (correct)
- Natural Resources
What can cause a shift in the Aggregate Supply curve?
What can cause a shift in the Aggregate Supply curve?
What is the purpose of expansionary fiscal policy during a recession?
What is the purpose of expansionary fiscal policy during a recession?
What can the government use to influence aggregate demand?
What can the government use to influence aggregate demand?
What is the result of the wealth effect on Aggregate Demand?
What is the result of the wealth effect on Aggregate Demand?
What happens to consumer spending when interest rates rise?
What happens to consumer spending when interest rates rise?
What is the effect of a lower price level on the demand for exports?
What is the effect of a lower price level on the demand for exports?
What is the normal rate of output around which the actual rate of output fluctuates?
What is the normal rate of output around which the actual rate of output fluctuates?
What is the effect of an increase in firm optimism on the Aggregate Demand curve?
What is the effect of an increase in firm optimism on the Aggregate Demand curve?
What does a change in C, I, G, or NX do to the Aggregate Demand curve?
What does a change in C, I, G, or NX do to the Aggregate Demand curve?
What does the aggregate demand curve represent in an economy?
What does the aggregate demand curve represent in an economy?
What is the formula for aggregate demand?
What is the formula for aggregate demand?
Why does the aggregate demand curve slope downward?
Why does the aggregate demand curve slope downward?
What is the natural rate of unemployment influenced by?
What is the natural rate of unemployment influenced by?
What is the opportunity cost of unemployment?
What is the opportunity cost of unemployment?
What is one of the costs of unemployment to the individual?
What is one of the costs of unemployment to the individual?
