Question 1
Keynesian LRAS suggests:
A.
Output may be below full employment with sticky wages B.
Exports equal imports C.
Only monetary policy works D.
No unemployment ever
Question 2
What is meant by sticky wages (keynesian)?
A.
Inverted L — elastic, bottleneck, inelastic sections. B.
LRAS shifts mirror outward PPF shifts. C.
Wages may not fall — unemployment can persist. D.
Keynesian region where only prices rise.
Question 3
What is meant by wage flexibility (classical)?
A.
Long-run aggregate supply — productive capacity. B.
Keynesian region where only prices rise. C.
LRAS shifts mirror outward PPF shifts. D.
Wages adjust to restore full employment.
Question 4
What is meant by yfe?
A.
LRAS shifts mirror outward PPF shifts. B.
Inverted L — elastic, bottleneck, inelastic sections. C.
Wages adjust to restore full employment. D.
Full employment level of real output.
Question 5
Classical LRAS is:
A.
Downward sloping B.
The same as AD C.
Vertical at full employment D.
Horizontal always
Question 6
LRAS shifts right when:
A.
Productive capacity increases B.
Imports rise only C.
AD falls D.
Inflation is zero
Question 7
What is meant by ppf link?
A.
Long-run average growth rate of potential GDP. B.
LRAS shifts mirror outward PPF shifts. C.
Wages adjust to restore full employment. D.
Inverted L — elastic, bottleneck, inelastic sections.
Question 8
What is meant by trend growth?
A.
Long-run average growth rate of potential GDP. B.
Long-run aggregate supply — productive capacity. C.
Keynesian region where only prices rise. D.
Wages adjust to restore full employment.
Question 9
Yfe is:
A.
Only exports B.
Full employment output C.
The inflation rate D.
Always zero
Question 10
What is meant by bottleneck capacity?
A.
LRAS shifts mirror outward PPF shifts. B.
Keynesian region where only prices rise. C.
Long-run aggregate supply — productive capacity. D.
Inverted L — elastic, bottleneck, inelastic sections.
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