Unit 3 Revision Flashcard

Front

Gross Domestic Product is the sum of the market value of the ____________

Back

Final goods and services

Front

If nominal GDP in 2021 exceeds the nominal GDP in 2020, but GDP per capita remains unchanged, then it can be inferred that:

Back

The population has risen

Front

Which of the following statements about economic recession is true? A recession is when economic growth slows significantly, A recession is when economic growth slows or grinds to a halt, A recession is when GDP falls in a nation, A recession is when real GDP falls in a nation

Back

A recession is when real GDP falls in a nation

Front

Which of the following would not cause a shift in the long-run aggregate supply curve?
An increase in available labour
An increase in the available capital
An increase in price expectations
An increase in the available land for economic activity

Back

An increase in price expectations

Front

Which of the following explains why the aggregate demand curve slopes downward?
- Individuals on lower income tend to have a higher MPC
- The opportunity cost of saving money increases
- The income and substitution effect
- The wealth and interest rate effect

Back

The wealth and interest rate effect

Front

In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to

Back

Shift the AD curve to the right only

Front

Suppose the economy is initially in long-run equilibrium and there is a drought, which destroys much of the wheat crop. This would be illustrated on aggregate demand and aggregate supply by the following:

Back

LRAS shifts to the left

Front

Stagflation occurs when the economy experiences

Back

Rising price levels and falling real output

Front

Which of the following will shift the short-run aggregate supply curve to the right?
- Fall in the production factors available in an economy
- Fall in average price levels
- Fall in the money supply
- Fall in labour costs

Back

Fall in labour costs

Front

The initial impact of an increase in government spending is to shift

Back

Aggregate demand to the right