Aggregate Demand & Aggregate Supply Practice

What type of shock is being shown in the diagram?

• positive demand shock

• negative demand shock

• positive supply shock

• negative supply shock

Organize these shifters under the correct curve.

Groups:

(a) Aggregate Demand Curve

,

(b) Aggregate Supply Curve

• Consumption

• Resource Prices & Availability

• Inflation Expectations

• Net Exports

• Productivity

• Investment

• Actions by the Government

• Government Spending

Which of the following graphs is an example of negative supply shock?

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• 
• 
• 

New AI technology makes manufacturing production more efficient. This would cause the aggregate ​ (a)   curve to shift to the ​ (b)   . At the new equilibrium point, price level ​ (c)   and output ​ (d)   .

• supply
• right
• decreased
• increased
• demand
• left

The short-run aggregate supply curve will:

• Shift to the right if commodity prices increase.

• Shift to the left if there is an increase in productivity.

• Shift to the left if nominal wages increase.

• Shift to the right if government spending increases.

What will generally happen to the aggregate demand curve when consumer confidence decreases?

• The curve shifts to the left

• No change in the curve

• The curve slopes upward

• The curve shifts to the right

Assume AD and AS are at equilibrium. If the aggregate demand curve shifts to the left, what happens to the price level and output to reach a new equilibrium point?

• PL increases & rGDP decreases

• PL increases & rGDP increases

• PL decreases & rGDP decreases

• PL decreases & rGDP increases

Assuming AD and AS are currently at equilibrium. If the aggregate supply curve shifts to the right, what happens to the price level and output?

• PL increases & rGDP increases

• PL increases & rGDP decreases

• PL decreases & rGDP decreases

• PL decreases & rGDP increases

Stagflation exists when the aggregate ​ (a)   curve shifts to the ​ (b)   and the price level ​ (c)   while rGDP ​ (d)   .

• supply
• left
• increases
• decreases
• demand
• right

Match the change to the graph with the correct scenario.

• AD shifts to the left

• Consumers have an increase in their disposable income due to a decrease in taxes

• AD shifts to the right

• Crash in the stock market causes business confidence to fall.

• SRAS shifts to the right

• Hottest summer on record is over, energy costs drop.

• SRAS shifts to the left

• Congress passes a new law to increase the minimum wage.