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