aggregate supply unemployment and inflation MCQs – Page 3

Practise focused aggregate supply unemployment and inflation questions with marked answers for exam preparation and subject revision.

aggregate supply unemployment and inflation Mcqs
41. The quantity theory of money says that changes in ____lead to equivalent changes in ____ but have no effect on ______?
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A. prices, wages, output and employment

B. output prices, employment

C. nominal money output prices

D. nominal money, the price level, output and employment
42. According to the classical economists, those who are not working ?
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A. are unable to find a job at the current wage rate

B. have chosen not to work at the market wage

C. have given up looking for a job but would accept a job at the current wage if one were offered to them.

D. are too productive to be hired at the current wage

43. The measured unemployment rate can be pushed below the natural rate, but ?
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A. only in the short run, and not without inflation

B. only in the long run and only if the price level is constant

C. only is the short run and only if the price level is constant

D. only in the long run and not without inflation

44. Potential GDP is the level of aggregate output ?
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A. that can be sustained in the long run, if the inflation rate is zero

B. that can be produced at a zero-unemployment rate

C. that can be produced if structural unemployment is zero

D. that can be sustained in the long run without inflation
45. The view of the Phillips curve that prevailed in the 1960s implied that policies that ?
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A. lower unemployment rate will tend to raise the inflation rate

B. lower inflation rate will tend to raise the unemployment rate

C. raise inflation rate will tend to raise the unemployment rate

D. lower unemployment rate will tend to lower the inflation rate