When the wage rate is above equilibrium wage rate it creates a

surplus of labor or unemployment

In the loanable funds market, the demand for loans comes from

borrowers seeking funds for investment or consumption.

individuals looking to save money.

government agencies providing grants.

lenders seeking to invest their savings.

In the loanable funds market the supply of loans comes from

savers in financial institutions

Aggregate demand may be defined as

the total demand for goods and services in an economy at a given price level and time period.

the total amount of money in circulation within an economy at a specific time.

the total supply of goods and services in an economy at a given price level and time period.

the overall production capacity of an economy regardless of price levels.

When the interest rate is lower than the equilibrium interest rate in the loanable funds market it creates a

equilibrium in the loanable funds market

Which of the following is NOT a reason for the inverse relationship between average price level and Aggregate demand?

Relative price between domestic and foreign goods

Which two cause shifts in the aggregate demand curve?

Changes in consumer spending and changes in government spending

Changes in interest rates and changes in inflation

Changes in production costs and changes in technology

Changes in foreign exchange rates and changes in trade policies

Under Classical Economics, this upward sloping curve represents

Short run aggregate Supply curve

Under Classical Economics, this vertical curve represents

Long-Run Aggregate Supply (LRAS)

Short-Run Aggregate Supply (SRAS)

Why is the long run supply curve vertical?

The long run supply curve is vertical because supply is fixed given that all resources are being used most efficiently

The long run supply curve is vertical as firms can easily enter and exit the market.

The long run supply curve is vertical because demand is fixed at the long run equilibrium price.

The long run supply curve is horizontal due to constant production costs.

Why is the short run supply curve upward sloping?

The short run supply curve is upward sloping because higher prices incentivize firms to increase production.

The short run supply curve is horizontal because firms cannot change output.

Higher prices lead to a decrease in production capacity.

The short run supply curve is downward sloping due to decreasing costs.

Which of the following is NOT a reason for a rightward shift of the Long run aggregate supply curve?

An improvement in labor productivity

An increase in technological advancements

Classical Economics

Authored by Carissa Ramnarine

Business

12th Grade

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT an assumption of Classical Economics?

Prices are flexible

Supply creates demand

Savings = investment

Markets can fail or have significant externalities.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The graph represents

the labor market

the consumer market

the housing market

the stock market

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define the term voluntary unemployment

Voluntary unemployment is when people are unable to find jobs due to a lack of skills.

Voluntary unemployment is the situation where individuals are unemployed by choice, as they are unwilling to accept the given wage rate in the market

Voluntary unemployment refers to individuals who are forced to leave their jobs due to health issues.

Voluntary unemployment occurs when individuals are laid off due to company downsizing.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The demand for labour comes from

automation technology

unemployed individuals

government regulations

employers or businesses

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The supply of labour comes from

Children under working age

Retired individuals

Unemployed individuals not seeking work

Individuals in the working-age population

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The vertical axis (y axis) in the labour market represents

job vacancies

wage rate or salary level

employment rate

worker productivity

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The horizontal axis (x axis) in the labour market represents

Total wage levels

Government regulations

Quantity of labor supplied or demanded

Employee benefits

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Classical Economics

Which of the following is NOT an assumption of Classical Economics?

The graph represents

Define the term voluntary unemployment

The demand for labour comes from

The supply of labour comes from

The vertical axis (y axis) in the labour market represents

The horizontal axis (x axis) in the labour market represents

When the wage rate is above equilibrium wage rate it creates a

A surplus of labour is otherwise known as

In the loanable funds market, the demand for loans comes from

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