Lesson 2.3.3

2.3.3 Long-run AS Quiz: Pearson Edexcel Economics, Unit 2

20 questions

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Lesson 2.3.3, Long-run AS: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 2: Theme 2: The UK economy – performance and policies, written with Revision Ninja.

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The 20 questions

  1. What shape is the classical long-run aggregate supply (LRAS) curve?

    • Downward sloping
    • Horizontal
    • Vertical
    • Upward sloping

  2. Which factor causes a rightward shift in an economy's long-run aggregate supply curve?

    • Better education
    • Increased oil prices
    • Higher income tax
    • Lower interest rates

  3. What is the shape of the Keynesian LRAS curve at low levels of output?

    • Vertical
    • Downward sloping
    • Upward sloping
    • Horizontal

  4. What is the long-run effect of an increase in aggregate demand in the classical model?

    • Lower unemployment
    • Higher real output
    • Higher price level
    • Lower price level

  5. How do government policies reducing structural unemployment affect the LRAS curve?

    • Movement upward along
    • Shifts to left
    • Shifts to right
    • Movement downward along

  6. Which demographic change causes a rightward shift in LRAS?

    • Increased working-age population
    • Lower net migration
    • Higher emigration
    • Increased retired population

  7. Which factor directly causes a leftward shift in an economy's LRAS curve?

    • Shrinking skilled labour force
    • Increased net migration
    • Improved education standards
    • Technological advances

  8. How does reducing business red tape shift the LRAS curve over time?

    • Shifts to right
    • Movement downward along
    • Movement upward along
    • Shifts to left

  9. Which factor does NOT shift the long-run aggregate supply (LRAS) curve directly?

    • Government regulation
    • Consumer confidence
    • Education and skills
    • Relative productivity

  10. What level of output does the classical long-run aggregate supply curve represent?

    • Full employment output
    • Spare capacity output
    • Short-run potential output
    • Equilibrium output gap

  11. Which factor directly causes a rightward shift in the long-run aggregate supply curve?

    • Higher consumer spending
    • Higher import tariffs
    • Lower interest rates
    • Higher labour productivity

  12. According to classical economists, what shape is the long-run aggregate supply curve?

    • Vertical
    • Downward sloping
    • Horizontal
    • Upward sloping

  13. If the LRAS curve shifts to the right while AD remains constant, the price level will:

    • Rise
    • Become volatile
    • Stay unchanged
    • Fall

  14. In a Keynesian LRAS model with high spare capacity, an increase in aggregate demand leads to:

    • Higher real output
    • Higher price level
    • Decreased productive capacity
    • Lower real output

  15. How does a permanent decrease in the labour force size affect the LRAS curve?

    • Shifts it left
    • Shifts it right
    • Makes it horizontal
    • Causes no shift

  16. Potential output is 1,000 billion and rises by 3% in a year because of productivity growth. What is the new potential output?

    • 1,300 billion
    • 970 billion
    • 1,003 billion
    • 1,030 billion

  17. Why does government investment in transport infrastructure shift the LRAS curve to the right?

    • Increases budget deficits
    • Lowers marginal consumption
    • Reduces consumer confidence
    • Increases productive capacity

  18. Which supply-side measure is most likely to reduce structural unemployment and shift LRAS right?

    • Better worker retraining
    • Increased income tax
    • Higher minimum wage
    • Higher unemployment benefits

  19. Which metric measures the difference between an economy's actual output and potential output?

    • The trade deficit
    • The output gap
    • The inflation rate
    • The multiplier effect

  20. Why can a severe financial crisis cause the LRAS curve to shift left?

    • Increased household saving
    • Lower interest rates
    • Reduced capital investment
    • Higher export demand

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