Aggregate Demand and Supply Dynamics in Economic Equilibrium

Aggregate Demand and Supply Dynamics in Economic Equilibrium

Assessment

Interactive Video

Economics, Social Studies, Business

9th - 12th Grade

Hard

Created by

Patricia Brown

FREE Resource

Mr. Clifford introduces aggregate demand and supply, explaining their slopes and how they meet at equilibrium. He discusses how shifts in these curves affect price levels and GDP, using historical examples like the Great Depression to illustrate demand shocks. The video covers short and long run equilibria, recessionary and inflationary gaps, and the economy's self-correcting nature. It highlights the role of government intervention in addressing economic gaps and the concept of sticky wages. The video concludes with a discussion on long run adjustments and the importance of understanding these economic principles.

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the equilibrium of Aggregate Demand and Supply represent?

The equilibrium for a single market

The equilibrium for all markets combined

The equilibrium for international trade

The equilibrium for government spending

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to price levels and output when Aggregate Demand increases?

Price levels decrease, output increases

Price levels decrease, output decreases

Price levels increase, output decreases

Price levels increase, output increases

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a demand shock?

A sudden increase in Aggregate Supply

A sudden increase in consumer savings

A sudden shift in Aggregate Demand

A sudden decrease in government spending

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What economic condition is characterized by high inflation and stagnant growth?

Deflation

Stagflation

Boom

Recession

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does a Recessionary Gap indicate in the short run?

Actual GDP is greater than potential GDP

Actual GDP is less than potential GDP

Actual GDP equals potential GDP

Actual GDP is unrelated to potential GDP

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does the economy self-correct during a recession?

Wages and resource prices decrease

Wages and resource prices increase

Government increases spending

Government decreases taxes

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why might government intervention be necessary during a recession?

Because wages adjust quickly

Because wages are sticky and adjust slowly

Because the economy never self-corrects

Because resource prices are flexible

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