Rigorous Economics Aggregate Demand And Supply Test - 90+ MCQs: Economics - Aggregate Demand and Supply Quiz: Assess Your Understanding with Comprehensive Questions and Answers - Economics Aggregate Demand And Supply Test

1. What does a shift to the right in the Aggregate Demand curve indicate?

Increased demand for goods and services

Decreased demand for goods and services

Increased supply of goods and services

Decreased supply of goods and services

2. Which of the following is considered a determinant of Aggregate Supply?

Consumer preferences

Labor force participation rate

Interest rates

Government spending

3. How does government intervention impact Aggregate Demand and Supply?

Government intervention has no impact on Aggregate Demand and Supply

Government spending can influence Aggregate Demand

Government policies affect only Aggregate Supply

Government intervention only affects Aggregate Demand

4. Examine the role of government regulation in shaping Aggregate Supply.

Government regulation has no impact on Aggregate Supply

Government regulations can influence production costs and impact Aggregate Supply

Government only regulates Aggregate Demand

Government regulation only affects consumer spending

5. Which of the following is a policy tool to combat a recessionary gap?

Expansionary fiscal policy

Contractionary monetary policy

Increase in taxes

Decrease in government spending

6. How does technological obsolescence affect Aggregate Demand?

Technological obsolescence decreases Aggregate Demand

Technological obsolescence increases Aggregate Demand

No impact on Aggregate Demand

Technological obsolescence only affects Aggregate Supply

7. What is the primary factor affecting the position of the short-run Aggregate Supply curve?

Technology

Labor force

Production costs

Consumer preferences

8. Discuss the impact of inflation on Aggregate Demand and Supply.

Inflation increases both Aggregate Demand and Aggregate Supply

Inflation decreases Aggregate Demand but increases Aggregate Supply

Inflation decreases both Aggregate Demand and Aggregate Supply

Inflation has no impact on Aggregate Demand and Supply

9. What is the concept of 'stagflation' in economics?

A situation of low inflation and high unemployment.

A situation of high inflation and low unemployment.

A situation of low inflation and low unemployment.

A situation of high inflation and high unemployment.

10. What is the primary reason for the upward slope of the Aggregate Supply curve in the short run?

Increasing production costs

Changes in consumer preferences

Expectations of higher future prices

Decrease in government spending

11. In the short-run, what can cause an economy to operate below its full employment level?

Recessionary gaps

Inflationary gaps

Stagflation

Deflationary gaps

12. Which of the following is a component of Aggregate Demand?

Government spending

Imports

Investment

Exports

13. Which of the following factors can cause a rightward shift in the Aggregate Demand curve?

Decrease in taxes

Increase in government spending

Higher interest rates

Decrease in consumer confidence

14. Which of the following is considered an external shock affecting Aggregate Supply?

Natural disasters

Changes in government policies

Technological advancements

Shifts in consumer preferences

15. What does the Aggregate Demand curve slope downward?

Due to the wealth effect

Due to changes in production costs

Due to changes in foreign exchange rates

Due to changes in technology

16. What is the difference between nominal GDP and real GDP?

Nominal GDP is adjusted for inflation, while real GDP is not.

Real GDP includes all goods and services, while nominal GDP excludes certain items.

Real GDP is adjusted for inflation and changes in price levels, while nominal GDP is not.

Nominal GDP is always higher than real GDP.

17. What is the Laffer Curve used to illustrate?

The relationship between tax rates and tax revenue.

The relationship between unemployment and inflation.

The impact of government spending on economic growth.

The relationship between exports and imports.

18. What is the crowding-out effect in economics?

An increase in government spending crowds out private investment.

An increase in exports leads to a decrease in imports.

An increase in consumer spending leads to a decrease in government spending.

An increase in tax revenues leads to higher government debt.

19. In the long run, what is the shape of the Aggregate Supply curve?

Upward-sloping

Downward-sloping

Vertical

Horizontal

20. What happens to the equilibrium price level when Aggregate Demand decreases?

Price level decreases

Price level increases

Price level remains unchanged

Price level becomes unpredictable

Economics - Aggregate Demand and Supply MCQ Test 4