Chapter 4.

AD –AS model
 Answer Key

1.  True

2. True

3.  True

4. True

5. False

6. True

7. False

8. False

9. True

10. False

11. False

12. c

13. d

14. d

15. d

16. a

17. a

18. b

19. b

20. c

21. c

22. a
23. a

24. c

25. b

26. d

27. c
28. AD curve shifts right, Price level and output both increase
29. SRAS curve shifts left, price level increase, output decrease
30. AD curve shifts left, Price level and output both decrease