Pearson Edexcel International AS Level · Economics (XEC11)

Aggregate supply (AS): Practice Questions

5 multiple-choice questions marked as you go, and 2 written questions with worked solutions. All on Aggregate supply (AS).

7 questions15 marksFree, no account

Question 1

1 mark

Which of the following is most likely to cause a leftward shift of the Short-Run Aggregate Supply (SRAS) curve?

Question 2

1 mark

In a classical long-run aggregate supply (LRAS) model, what is the most likely effect of a sustained increase in the net migration of skilled workers into an economy?

Question 3

1 mark

Consider an economy initially in long-run equilibrium. If there is a simultaneous increase in the international price of oil and a decrease in consumer confidence, what is the predicted short-run effect on the price level and real GDP?

Question 4

1 mark

The diagram shows a rightward shift of the Short-Run Aggregate Supply (SRAS) curve from \(SRAS_{1}\) to \(SRAS_{2}\). Which of the following is the most likely cause of this shift?

Question 5

1 mark

A Keynesian Long-Run Aggregate Supply (LRAS) curve is horizontal at low levels of real output. Which of the following best explains this shape?

Question 6

3 marks

In a diagram of the Keynesian Long-run Aggregate Supply (LRAS) curve, explain why the curve is horizontal at low levels of real national output.

Write your answer out first, then check it against the worked solution.

Question 7

7 marks

Assume an economy is currently in long-run equilibrium at the full employment level of output. A sudden increase in the global price of oil significantly increases production costs for firms.
(a) Explain the difference between a movement along and a shift of the Short-run Aggregate Supply (SRAS) curve in this context.
(b) Evaluate the impact of this supply-side shock on the price level and real output. Support your answer with a diagram showing the transition from the initial equilibrium to the new equilibrium.

Write your answer out first, then check it against the worked solution.

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