Lesson 2.4.3

2.4.3 Equilibrium levels of real national output Quiz: Pearson Edexcel Economics, Unit 2

20 questions

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Lesson 2.4.3, Equilibrium levels of real national output: 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. At what point is equilibrium real national output determined in an AD/AS diagram?

    • Injections equal taxes
    • AD intersects AS
    • AS becomes vertical
    • AD equals zero

  2. What happens to the price level when aggregate demand exceeds aggregate supply?

    • It falls
    • It becomes negative
    • It remains constant
    • It rises

  3. What happens to price level and output when AD shifts right along an SRAS curve?

    • Output falls only
    • Both decrease
    • Both increase
    • Prices rise only

  4. What happens to the price level and real output when short-run aggregate supply shifts left?

    • Both fall
    • Higher prices, lower output
    • Both rise
    • Lower prices, higher output

  5. In long-run macroeconomic equilibrium, real national output is always equal to what?

    • Friction output
    • Potential output
    • Negative output
    • Cyclical output

  6. Which shift in an AD/AS diagram causes both real national output and price level to rise?

    • Rightward LRAS shift
    • Rightward AD shift
    • Leftward SRAS shift
    • Leftward AD shift

  7. Equilibrium real national output in an economy changes following a shift in which curves?

    • Tax curves only
    • Exchange rate only
    • AD or AS
    • Only money supply

  8. Stagflation is represented on an AD/AS diagram by which curve shift?

    • Rightward SRAS shift
    • Rightward AD shift
    • Leftward SRAS shift
    • Leftward LRAS shift

  9. What happens to the price level if aggregate demand is 1,200 and aggregate supply is 1,000?

    • They fall
    • They rise
    • Output falls to zero
    • They remain constant

  10. If actual output is 800 and potential output is 900, what type of output gap exists?

    • Positive output gap
    • Zero output gap
    • Multiplier output gap
    • Negative output gap

  11. In AD/AS analysis, the exact impact of an AD shift on price level depends on what?

    • Nominal tax rate
    • Elasticity of AS
    • Currency printed
    • Size of population

  12. If consumer confidence rises, shifting AD right along SRAS, what happens to price level and output?

    • Both decrease
    • Output falls only
    • Both increase
    • Prices rise only

  13. What causes actual national output to temporarily deviate from potential output in the short run?

    • Demand shocks
    • Perfect competition
    • Constant technology
    • Fixed exchange rates

  14. What economic outcome results from a leftward shift in short-run aggregate supply?

    • Deflation
    • Demand-pull inflation
    • Stagflation
    • Economic boom

  15. Why does the short-run aggregate supply curve slope upwards?

    • Falling consumer demand
    • Sticky wage costs
    • Constant profit margins
    • Flexible input prices

  16. What shifts SRAS left to restore long-run equilibrium after a positive demand shock?

    • Increased labour productivity
    • Lower indirect taxes
    • Rising wage costs
    • Falling raw materials

  17. In which macroeconomic model is long-run output always fixed at full employment?

    • Keynesian model
    • Accelerator model
    • Harrod-Domar model
    • Classical model

  18. Which curve shift moves equilibrium price level and real output in opposite directions?

    • SRAS shift
    • Export shift
    • AD shift
    • LRAS shift

  19. What happens to the price level and real output when aggregate demand falls along SRAS?

    • Prices fall, output rises
    • Both rise
    • Both fall
    • Prices rise, output falls

  20. How do firms initially respond when aggregate demand unexpectedly exceeds current national output?

    • Lower prices
    • Run down stocks
    • Accumulate stocks
    • Reduce employment

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