Krugman's Economics for AP

Margaret Ray

Chapter 19 Equilibrium in the Aggregate DemandAggregate Supply Model - all with Video Answers

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Chapter Questions

Problem 1

Which of the following causes a negative supply shocl
I. a technological advance
II. increasing productivity
III. an increase in oil prices
a. I only
b. II only
c. III only
d. I and III only
e. I, II, and III

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Problem 2

Which of the following causes a positive demand shod
a. an increase in wealth
b. pessimistic consumer expectations
c. a decrease in government spending
d. an increase in taxes
e. a relatively high existing stock of capital

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02:36

Problem 3

During stagflation, what happens to the aggregate pr: level and real GDP?
Aggregate price level Real GDP
a. decreases increases
b. decreases decreases
c. increases increases
d. increases decreases
e. stays the same stays the same

Oluwadamilola Ameobi

Numerade Educator

Problem 4

Which of the following statements is true if this economy is operating at $P_1$ and $Y_1$ ?
1. The level of aggregate output equals potential output.
II. It is in short-run macroeconomic equilibrium.
III. It is in long-run macroeconomic equilibrium.
a. I only
b. II only
c. III only
d. II and III
e. I and III

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Problem 5

The economy depicted in the graph is experiencing a(n)
a. contractionary gap.
b. recessionary gap.
c. inflationary gap.
d. demand gap.
e. supply gap.

Rashmi Sinha

Numerade Educator