Micro Economics MCQ (GK Set-1) with Answers

Micro Economics MCQ (GK Set-1) with Answers

426) Suppose that a country is in short-run equilibrium at the point where its aggregate demand curve intersects its aggregate supply curve. Then aggregate demand falls. Which of the following does not help to explain why output may then move to a lower short-r

Answer is:

Prices may be sticky upwards

427) Which of the following statements about a country’s long-run aggregate supply curve, LAS, is true?

Answer is:

It is vertical throughout its length at the output which would be produced if there were only natural unemployment

428) Suppose an economy is in short-run and long-run equilibrium where its AD, SAS, and LAS curves intersect. Then there is a demand shock and AD shifts to the right. Which of the following statements is false?

Answer is:

In the long run, the price level will equal the original level

429) Suppose an economy is in short-run and long-run equilibrium where its AD, SAS and LAS curves intersect. Then there is an improvement in technology which leads to a higher demand for labour, so increasing the level of natural employment and the level of pot

Answer is:

The new SAS curve will be to the left of the original SAS

430) Suppose an economy is in short-run and long-run equilibrium where its AD, SAS and LAS curves intersect. Then there is an increase in the price of imported inputs. Which of the following statements about the new long-run equilibrium position is false?

Answer is:

The new AD curve will be to the left of the original AD

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