Week 5 — Quiz · Aggregate Demand & Aggregate Supply

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 5 · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-05-qti.xml for the Canvas import. Every numeric answer is pre-computed; every curve-shift claim is verified.

The questions (human-readable; answer key below)

Q1. Aggregate demand slopes downward mainly because of the wealth effect, the interest-rate effect, and the exchange-rate effect. Which of the following is NOT one of these three reasons?
A) A lower price level raises the real value of savings, so people feel wealthier and spend more B) A lower price level frees up money for saving, pushing interest rates down and raising investment C) A lower price level makes one product relatively cheaper than a substitute, so buyers switch toward it D) A lower price level makes domestic goods cheaper abroad, raising net exports

Q2. Short-run aggregate supply (SRAS) slopes upward mainly because —
A) potential output is directly set by the price level B) many prices, especially wages, are sticky in the short run, so a higher price level raises firms' revenue faster than their costs C) the economy always produces at potential output in the short run D) higher prices always reduce the total quantity supplied

Q3. Long-run aggregate supply (LRAS) is drawn as a vertical line because —
A) prices can never change in the long run B) output is fixed at whatever aggregate demand happens to be C) once all prices, including wages, have fully adjusted, output is set only by real resources and technology — the economy's potential output D) the price level always equals zero in the long run

Q4. Aggregate demand is P = 18 − Y/100 and short-run aggregate supply is P = 6 + Y/100. What is the equilibrium value of Y?
A) 400 B) 600 C) 800 D) 1,000

Q5. Using the same system as Q4 (baseline equilibrium Y = 600, P = 12), consumer confidence drops sharply, shifting AD to P = 16 − Y/100 (SRAS unchanged). What happens to the new equilibrium?
A) Y falls to 500, P falls to 11 B) Y rises to 700, P rises to 13 C) Y stays at 600, only P changes D) P stays at 12, only Y changes

Q6. Using the same baseline as Q4 (AD: P = 18 − Y/100, SRAS: P = 6 + Y/100, equilibrium Y = 600, P = 12), an oil-price shock raises firms' costs, shifting SRAS to P = 8 + Y/100 (AD unchanged). What happens to the new equilibrium?
A) Y rises to 700, P falls to 10 B) Y falls to 500, P rises to 13 — stagflation C) Y falls to 500, P falls to 11 D) Y and P are both unchanged

Q7. (Select all that apply.) Which of the following statements about the AD–AS model are TRUE?
☑ A) A change in the price level itself is a movement along the AD or SRAS curve, not a shift of either curve ☐ B) AD slopes down for the same reason a single product's demand curve slopes down ☑ C) An oil-price shock that raises firms' costs shifts SRAS to the left ☐ D) LRAS is drawn as an upward-sloping curve ☑ E) A rise in government spending, holding everything else constant, shifts AD to the right

Q8. (True/False) When short-run aggregate supply shifts left due to an input-cost shock, the price level and real output move in the same direction. → False

Q9. (Matching) Match each shifter to the curve it shifts: A rise in consumer confidence → Aggregate demand (AD); An oil-price shock raising firms' costs → Short-run aggregate supply (SRAS); A rise in government spending → Aggregate demand (AD); A new technology that lowers production costs economy-wide → Short-run aggregate supply (SRAS). (Distractor pool includes both AD and SRAS as options for every prompt.)

Q10. A news report says "real output fell 2% and the price level rose sharply this quarter." Based on the graph-logic canon, this pattern is most consistent with —
A) an increase in aggregate demand B) a decrease in aggregate demand C) a decrease in short-run aggregate supply (e.g., an input-cost shock) D) an increase in short-run aggregate supply

Answer key & feedback (instructor)

Quantitative gate: PASS — every numeric answer re-computed: Q4 (18−6=12, 12÷(2/100)=600, P=18−6=12); Q5 (16−6=10, 10÷(2/100)=500, P=16−5=11); Q6 (18−8=10, 10÷(2/100)=500, P=18−5=13). Full derivation in _build/logs/week-05-numbers.txt.
Graph-logic check: PASS — every curve-shift claim verified against the NUMBERS_PACK canon: Q1/Q7 correctly excludes the microeconomic-substitution reason from AD's downward slope; Q3/Q7 correctly states LRAS is vertical, not upward-sloping; Q5 (AD-left → P&Y both down); Q6/Q8/Q10 (SRAS-left → P up, Y down — stagflation, opposite directions); Q9 correctly assigns demand-side shifters to AD and supply-side shifters to SRAS.

Quality gate (self-checked): every single-answer item has exactly one correct option; distractors target the named traps (microeconomic substitution smuggled into AD's slope, LRAS drawn as upward-sloping, wrong curve shifted, P/Y direction reversed on a supply shock, movement-along mistaken for a shift). No free numeric entry; no essay. Includes ≥2 "which curve shifts, which way, what happens to P & Y" items (Q5, Q6, Q10, and the T/F Q8), ≥1 matching item (Q9, shifter → curve), ≥1 multiple-answer item (Q7), and ≥1 true/false item (Q8).