Practice MCQ Questions and answers on The Aggregate Demand Aggregate Supply Model Mcqs

A. Prices to rise and output to rise

B. Price to fall and output to remain unchanged

C. Prices to fall and output to fall

D. prices to rise and output to remain unchanged

A. Shift aggregate demand to the left

B. Shift short run aggregate supply to the left

C. shift aggregate demand to the right

D. shift short-run aggregate supply to the right

A. rising prices and rising output

B. rising prices and falling output

C. falling prices and falling output

D. falling prices and rising output

A. Price rise; output falls

B. Price fall; output rises

C. Price rise; output rises

D. Price fall; output falls

A. Price fall; output rises

B. Price fall; output falls

C. Price rise; output fall

D. Price rise; output rise

A. sticky-wage theory of the short-run aggregate supply curve

B. classical dichotomy theory of the short-run aggregate supply curve

C. misperceptions theory of the short-run aggregate supply curve

D. sticky-price theory of the short run aggregate supply curve

A. lower prices increase the value of money holding and consumers spending increase

B. lower prices decrease the value of money holding and consumers spending decrease

C. lower prices reduce money holding increase lending, interest rates fall and investment spending increase

D. lower prices increase money holding decrease lending, interest rates rise and investment spending falls

A. The exchange-rate effect

B. The wealth effect

C. The classical dichotomy/monetary neutrality effect

D. The interest-rate effect

A. lower prices increase money holdings decrease lending interest rates rise, and investment spending falls

B. lower prices increase the value of money holding and consumer spending increases

C. lower prices decrease the value of money holdings and consumers spending decreases

D. lower prices reduce money holdings increase lending interest rates fall, and investment spending increase

A. fail to respond to the adverse supply shock and allow the economy to adjust on its own.

B. respond to the adverse supply shock by decreasing aggregate demand which lower prices

C. respond to the adverse supply shock by decreasing short run aggregate supply

D. respond to the adverse supply shock by increasing aggregate demand, which further raises prices