
3.6 Demand & Supply Shocks
Presentation
•
Social Studies
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12th Grade
•
Medium
Emily Miller
Used 2+ times
FREE Resource
11 Slides • 7 Questions
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Multiple Choice
The table shows the level of household savings at various levels of disposable income in a country.
Based on the level of savings and disposable income data in the table, which of the following must be true?
The marginal propensity to save is 0.2
The marginal propensity to save is 0.9
The marginal propensity to consume is 0.9
The marginal propensity to consume is 0.1
3
Multiple Choice
Assume the marginal propensity to consume is 0.8. How will a decrease in taxes of $100 billion and a decrease in government spending of $100 billion affect aggregate demand?
Aggregate demand will decrease by $900 billion.
Aggregate demand will decrease by $500 billion.
Aggregate demand will not change.
Aggregate demand will decrease by $100 billion.
4
Multiple Choice
When the short-run aggregate equilibrium is to the right of the long-run aggregate supply curve, the economy is experiencing
an export gap.
an import gap.
a recessionary gap.
an inflationary gap.
an interest rate gap.
5
Multiple Choice
Which factor can increase aggregate demand?
Decrease in income.
Increase in income.
Decrease in the availability of substitutes.
Decrease in consumer preferences.
6
Multiple Choice
Assume the countries of Ornania and Kumbagi are major trading partners. Ornania is currently in long-run macroeconomic equilibrium. As a result of a recession in its economy, Kumbagi decreases its demand for goods produced in Ornania. Which of the following will occur in Ornania in the short run?
The aggregate demand curve will shift to the left, resulting in an inflationary gap.
The aggregate demand curve will shift to the left, resulting in a recessionary gap.
The short-run aggregate supply curve will shift to the left, resulting in an inflationary gap.
The short-run aggregate supply curve will shift to the left, resulting in a recessionary gap.
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demand
8
Open Ended
What do you think a demand or supply shock is?
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Open Ended
If the economic is in short-run and long-run equilibrium, what do you think a positive demand shock will do to the economy?
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