1.What are the two main components of business cycle theories?

A) A description of shocks and a model of how the economy responds to them

B) A model of how people decide to spend and a description of the government's role in the economy

C) A model of how equilibrium is reached and a description of the government's role in the economy

D) A description of shocks and a description of the government's role in the economy

2.The three main components of the aggregate demandaggregate supply model include

A) AD, SRAS, LM.

B) SRAS, LRAS, IS.

C) AD, IS, LM.

D) AD, SRAS, LRAS.

3.When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the aggregate demand curve

A) slopes upward.

B) slopes downward.

C) is vertical.

D) is horizontal.

4.When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long-run aggregate supply curve

A) slopes upward.

B) slopes downward.

C) is vertical.

D) is horizontal.