Practice C. Aggregate Demand And Aggregate Supply (ad/as) (1.3)

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6 sample questions

Question 1.
What does the AD curve represent?
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Think about what influences consumer and government demand.
Question 2.
Identify one factor that can shift the AS curve.
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Consider how production methods affect output.
3Question 3.
What causes the AD curve to shift to the right?
- Decrease in consumer confidence
- Increase in government spending
- Decrease in taxes
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Consider factors that enhance total spending.
4Question 4.
True or False: The AS curve is vertical in the short run.
- True
- False
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Recall the differences in AS curve behaviors over time.
Question 5.
If the government reduces taxes, analyze how this will affect the AD curve and the short-run AS curve. Provide reasoning for your answer.
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Consider the relationship between disposable income and spending.
Question 6.
Evaluate the potential long-term implications of continual government stimulus on the economy's AS curve. What might happen if this policy is sustained?
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Think about the effects of policy on resources and production capabilities.

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