2. Macroeconomics

Aggregate Supply — Quiz

Test your understanding of aggregate supply with 5 practice questions.

Practice Questions

Question 1

Given the short‐run aggregate supply function $Y=1000+25(P-P^e)$, if the expected price level is $P^e=105$ and the actual price level is $P=115$, what is the equilibrium output $Y$?

Question 2

Which of the following policy measures would shift the long‐run aggregate supply (LRAS) curve to the right?

Question 3

A one‐time adverse weather event destroys crops, while a permanent advancement in irrigation technology occurs. In AD–AS terms, which curves shift and in what directions?

Question 4

Suppose aggregate demand and short‐run aggregate supply both increase by 10%, represented by parallel rightward shifts. What happens to the equilibrium price level and real GDP?

Question 5

Which term describes the simultaneous occurrence of rising price levels and falling real GDP?