Question 1) State aggregate demand and aggregate supply.
Question 2) Write down three reasons why aggregate demand curve slopes downward.
Question 3) Demonstrate, label, and describe three ranges of the aggregate supply curve.
Question 4) Write the determinants of the aggregate demand curve’s location.
Question 5) Describe the shape of aggregate supply curve.
Question 6) Point out the determinants of supply curve’s location.
Question 7) Describe how the market economy moves to equilibrium price and output level.
Question 8) Predict effects of the increase in aggregate demand when economy is in (a) horizontal range, (b) intermediate range, and (c) vertical range.
Question 9) Describe how multiplier is weakened in an intermediate or vertical range of aggregate supply.
Question 10) Write three basic causes of changes in aggregate supply distinguishing between leftward and rightward shifts of the curve.