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Question 1 (1 point) Consider the AD/AS model in the short-run. All else equal, which of the following will lead to an increase in the price level and in real GDP. a) An increase in desired savings. O b) An increase in government transfer payments. O c) An increase in average wages. O d) An improvement in production technology. O e) An increase in the net tax rate. Question 2 (1 point) Which of the following could cause a leftward shift of the aggregate demand (AD) curve? O A) an increase in the net tax rate B) an increase in government transfer payments to households O C) an increase in government purchases O D) an increase in desired investment O E) an increase in desired exportsQuestion 3 (1 point) When the economy's AS curve is positively sloped, the multiplier in the AD/AS model is O A) constant. B) smaller than the simple multiplier. O C) equal to the simple multiplier. O D) larger than the simple multiplier. O E) equal to one. Question 4 (1 point) Consider the AD/AS model in the short-run. Which of the following changes will cause the price level to decrease and real GDP to increase? a) A decrease in aggregate supply. b) An increase in aggregate supply. O c) An increase in aggregate demand. O d) A decrease in aggregate demand.Question 5 (1 point) Which of the following would likely cause a downward parallel shift in the AE curve and a leftward shift in the AD curve? A) a reduction in government purchases O B) an increase in the price level O C) a decrease in the MPC O D) an increase in the business confidence of firms O E) a decrease in the price level Question 6 (1 point) Consider the basic AD/AS model. If there is a decrease in the cost of non-labour inputs to production, the result will be to A) cause a movement to the left along the AS curve. O B) shift the AD curve to the left. O C) shift the AS curve to the right. O D) shift the AD curve to the right. O E) shift the AS curve to the left.Question 7 (1 point) Consider the AD/AS model in the short-run. All else equal, which of the following will lead to an increase in the price level and a decrease in real GDP. O a) An increase in government transfer payments. O b) An improvement in production technology. O c) An increase in average wages. O d) An increase in the net tax rate. O e) An increase in desired savings. Question 8 (1 point) The economy's aggregate supply curve is drawn under two main assumptions. They are A) firms' unit costs are constant; prices of all factors of production are constant. O B) firms will produce more output only if prices rise; technology improves only if prices rise. O C) firms' unit costs are constant; the state of technology is constant. O D) the prices of all factors of production are constant; productivity improves as the price level rises. OF) the prices of all factors of production are constant; the state of technology is constant.Question 9 (1 point) Consider the AD/AS model. In the short-run, an increase in the interest rate will cause: O a) A fall in real GDP and in the price level. O b) An increase in real GDP and the price level. O c) A fall in real GDP and an increase in the price level. O d) Neither real GDP nor the price level are affected. O e) An increase in real GDP and a fall in the price level. Question 10 (1 point) If the economy is in macroeconomic equilibrium with a vertical AS curve, and then aggregate demand decreases, we expect the AE function to shift to a O A) higher level and stay there. B) higher level but then return to its original position as the price level falls. O C) lower level, but then return to its original position as the price level falls. O D) lower level and stay there. O E) higher level, but then shift part of the way down to its original position as the price level falls.Question 11 (1 point) Suppose the economy is hit by a shock and we observe that the price level has decreased whereas real GDP has increased. We can conclude that this shock was O A) a positive AS shock. O B) a negative technology shock. O C) a positive AD shock. O D) a negative AS shock. O E) a negative AD shock. Question 12 (1 point) Which of the following would cause the Aggregate Expenditure curve to shift up, and the Aggregate Demand curve to shift to the right? a) An increase in the tax rate. O b) An increase in desired savings. O c) An increase in government spending. O d) An appreciation of the Canadian dollar. O e) A reduction in incomes in foreign countries