Question 1

Changes in supply plans for existing inputs affect aggregate quantity supplied.

Accepted Answer

Changes in supply plans for existing inputs can lead to changes in the quantity supplied in the market, which can affect the aggregate quantity supplied. For example, if a supplier decides to increase production of a particular input, it can lead to an increase in the quantity supplied of the final product, and thus impact the aggregate quantity supplied.

Question 2

Human capital decisions affect both long-run and short-run aggregate supply.

Accepted Answer

Human capital decisions, such as education and training, can affect the productivity of workers and therefore have an impact on both the short-run and long-run aggregate supply. In the short-run, increased human capital can lead to higher productivity and higher output. In the long-run, it can lead to sustained economic growth and higher potential output.

Question 3

A positive supply shock in macroeconomics is like an increase in quantity supplied in microeconomics.

Accepted Answer

The answer of A positive supply shock in macroeconomics is...

Question 4

Low prices in the domestic wheat market cause farmers to switch some sales to export markets. This decision reduces aggregate quantity supplied.

Accepted Answer

Switching sales to export markets does not reduce the aggregate quantity supplied; it merely redirects where the product is sold, from the domestic to the international market.

Question 5

Reductions in government subsidies on electricity prices are a positive supply shock.

Accepted Answer

Reductions in government subsidies on electricity prices would lead to an increase in electricity prices, which would result in a negative supply shock for consumers.

Question 6

The law of short-run aggregate supply states that aggregate supply increases as the price level rises.

Accepted Answer

The answer of The law of short-run aggregate supply states...

Question 7

Government can affect aggregate quantity supplied with changes in immigration policies.

Accepted Answer

The answer of Government can affect aggregate quantity supplied with...

Question 8

Prospecting for gold in northern Alberta is a business supply choice that increases aggregate quantity supplied.

Accepted Answer

Prospecting for gold does not directly increase the aggregate quantity supplied as it is an activity focused on exploration and discovery, not production or supply of goods and services in the economy.

Question 9

The law of short-run aggregate supply states that aggregate quantity supplied increases as the price level rises.

Accepted Answer

This is because firms are willing to produce and supply more output in the short run as prices increase, since they can earn more profit per unit sold. However, this law only applies to the short run as in the long run, firms can adjust their production capacity and input prices, leading to a vertical long-run aggregate supply curve.

Question 10

Supply plans to increase the quality of inputs affect aggregate quantity supplied.

Accepted Answer

Supply plans to increase the quality of inputs primarily affect the quality of the output rather than the aggregate quantity supplied.

Question 11

Changes in the quantity used of existing inputs affect aggregate quantity supplied, while changes in the quality of inputs affect both long-run and short-run aggregate supply.

Accepted Answer

Changes in the quantity used of existing inputs, such as hiring more workers or increasing the amount of raw materials used, will directly affect the level of aggregate quantity supplied in the short run. However, changes in the quality of inputs, such as improving worker skills or using higher quality materials, can lead to increases in productivity and efficiency in the long run, affecting both long-run and short-run aggregate supply.

Question 12

A positive supply shock in macroeconomics is like an increase in supply in microeconomics.

Accepted Answer

A positive supply shock in macroeconomics refers to an increase in the economy's aggregate supply, which is similar to an increase in supply at the microeconomic level.

Question 13

A Federal Government program that gives ten-year work visas to international students graduating from Canadian colleges and universities increases short-run aggregate supply.

Accepted Answer

By giving ten-year work visas to international students, the program increases the number of skilled workers in the labor market, leading to an increase in short-run aggregate supply. This is because more workers can contribute to the production process, leading to an increase in output.

Question 14

Supply plans to increase the quantity of inputs affect aggregate quantity supplied.

Accepted Answer

The answer of Supply plans to increase the quantity of...

Question 15

A negative supply shock in macroeconomics is like a decrease in quantity supplied in microeconomics.

Accepted Answer

The answer of A negative supply shock in macroeconomics is...

Question 16

New policies by the government of British Columbia allowing the cultivation and export of marijuana increase short-run aggregate supply.

Accepted Answer

Allowing the cultivation and export of marijuana will increase the production of marijuana, thus increasing the short-run aggregate supply in the market.

Question 17

A positive supply shock raises prices for resource inputs.

Accepted Answer

A positive supply shock is an event that increases the supply of goods and services, causing prices to decrease. It is not expected to raise prices for resource inputs.

Question 18

Government can affect both long-run and short-run aggregate supply with changes in labour market policies.

Accepted Answer

Changes in labour market policies such as minimum wage laws or government-funded training programs can affect the availability and productivity of workers, therefore impacting both short-run and long-run aggregate supply.

Question 19

Supply plans to increase inputs affect both long-run and short-run aggregate supply.

Accepted Answer

Increasing inputs such as labor, raw materials, and capital can increase both short-run and long-run aggregate supply as it allows firms to increase production and output in the short run and expand capacity and efficiency in the long run.

Question 20

A negative supply shock in macroeconomics is like a decrease in supply in microeconomics.

Accepted Answer

A negative supply shock in macroeconomics refers to a sudden decrease in the overall supply of goods and services in an economy due to a disruption in production or distribution. This is similar to a decrease in supply in microeconomics, where a firm or industry experiences a decrease in production capacity, leading to a lower quantity of goods and services available in the market. Both situations result in a decrease in the quantity of goods and services available to consumers, leading to higher prices and potentially lower economic output.

Quiz 8: Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand