AD And AS Analysis

Question 1

When does the Macroeconomic equilibrium occur?

Answer 1

When AD equals AS

Question 2

3 effects of a rightwards shiftvof AD

Answer 2

1. Real national output has increased
2. The price level has increased
3. Unemployment has fallen

Question 3

Economic shock

Answer 3

Unexpected event hitting the economy

Question 4

4 demand side shocks

Answer 4

1. Capital investment boom
2. Exchange rate change
3. Change in foreign incomes
4. Change in foreign interest rates

Question 5

4 supply side shocks

Answer 5

1. War/revolution
2. Population change
3. Freak weather
4. Change in raw material prices