1.The diagram below shows three aggregate demand (AD) andthree long-run aggregate supply (LRAS) curves for an economy, with the initialequilibrium at X.
What would be the most likely new long-runequilibrium position, A, B, C or D, following government policy to lower theexchange rate and to improve the quality of the labour force through retrainingprogrammes?
2.Which one of the following is a fundamentaldeterminant of long-run aggregate supply?
B. The outputgap
C. Realnational output
D. The institutional structure of the economy
3.Which one of the following is most likely to shiftthe short-run aggregate supply curve to the left? A rise in
C. theexchange rate.
D. labour productivity.
4.The diagram below shows two aggregate demand (AD)curves and the short-run aggregate supply (SRAS) curve for an economy.
The shift in aggregate demand from AD1 to AD2 couldhave been caused by an increase in
A. the price of raw materials.
B. the exchange rate.
C. labour productivity.
D. the budget deficit.
5.The diagram below shows aggregate demand (AD),short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves foran economy.
The economy is operating with
A. inflationary pressures.
B. cyclical unemployment.
C. under-used capacity.
D. a negative output gap