ECON 203 EXAM 2 (PAKHOTINA) EXAM || MOST RECENT
EXAM 2026|2027 ACTUAL COMPLETE REAL EXAM QUESTIONS
AND CORRECT ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+ | GUARANTEED SUCCESS!! NEWEST EXAM | JUST
RELEASED!!
Factors that shift AD curve through change in consumption -ANSWER--
taxes on consumers
-interest rates
-housing market
-stock market
-consumers' confidence
Factors that shift AD curve through change in investment -ANSWER--
taxes on capital
-interest rates
-business confidence
Factors that shift AD curve through change in net exports -ANSWER--
trade agreements between countries
-economic growth abroad
-exchange rate of dollar to other currencies
-change in demand for US goods from other countries
,Aggregate supply -ANSWER-The sum total of the production of all the
firms in the economy
The AS curve shows the relationship between the overall price level in
the economy and total production by firms
Why SRAS is upward sloping -ANSWER-Because of "sticky prices and
wages"
Prices of final goods increase more quickly than input prices (because of
contracts), and firm's revenue increases as price of final goods rises
while input prices have not adjusted yet
LRAS -ANSWER--the long run is the time required for input prices to
fully adjust to economic conditions
-when input costs adjust, the economy returns to where it started
-changes in the price level do not affect aggregate supply in the long
run
-the LRAS is vertical because it is not affected by price level
-LRAS represents potential output in the economy if operating at full
capicity
The business cycle -ANSWER-Fluctuations of output around the level of
potential output
-when output is higher than potential output, economy is in a boom
-when output is below potential, the economy is in a recenssion
, Shifting LRAS curve -ANSWER-The LRAS curve shifts if there is a change
in
1. productivity
2. factors of production
ex:
-technology (foreign investments)
-labor (immigration)
-human capital (education, grants)
-natural resources (new sources found, climate change)
Short run and long run equilibrium -ANSWER-Short run: occurs at the
intersection of the AD and SRAS
Long run: occurs where the AD curve crosses both the LRAS and SRAS
Fiscal policy -ANSWER-Refers to government decisions about the level
of taxation or government spending
How does fiscal policy affect the economy? -ANSWER-By influencing
aggregate demand through government spending and tax policies that
directly affect consumption and investment which impact AD
Expansionary fiscal policy -ANSWER-Increased government spending
and lower taxes have expansionary effects
EXAM 2026|2027 ACTUAL COMPLETE REAL EXAM QUESTIONS
AND CORRECT ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+ | GUARANTEED SUCCESS!! NEWEST EXAM | JUST
RELEASED!!
Factors that shift AD curve through change in consumption -ANSWER--
taxes on consumers
-interest rates
-housing market
-stock market
-consumers' confidence
Factors that shift AD curve through change in investment -ANSWER--
taxes on capital
-interest rates
-business confidence
Factors that shift AD curve through change in net exports -ANSWER--
trade agreements between countries
-economic growth abroad
-exchange rate of dollar to other currencies
-change in demand for US goods from other countries
,Aggregate supply -ANSWER-The sum total of the production of all the
firms in the economy
The AS curve shows the relationship between the overall price level in
the economy and total production by firms
Why SRAS is upward sloping -ANSWER-Because of "sticky prices and
wages"
Prices of final goods increase more quickly than input prices (because of
contracts), and firm's revenue increases as price of final goods rises
while input prices have not adjusted yet
LRAS -ANSWER--the long run is the time required for input prices to
fully adjust to economic conditions
-when input costs adjust, the economy returns to where it started
-changes in the price level do not affect aggregate supply in the long
run
-the LRAS is vertical because it is not affected by price level
-LRAS represents potential output in the economy if operating at full
capicity
The business cycle -ANSWER-Fluctuations of output around the level of
potential output
-when output is higher than potential output, economy is in a boom
-when output is below potential, the economy is in a recenssion
, Shifting LRAS curve -ANSWER-The LRAS curve shifts if there is a change
in
1. productivity
2. factors of production
ex:
-technology (foreign investments)
-labor (immigration)
-human capital (education, grants)
-natural resources (new sources found, climate change)
Short run and long run equilibrium -ANSWER-Short run: occurs at the
intersection of the AD and SRAS
Long run: occurs where the AD curve crosses both the LRAS and SRAS
Fiscal policy -ANSWER-Refers to government decisions about the level
of taxation or government spending
How does fiscal policy affect the economy? -ANSWER-By influencing
aggregate demand through government spending and tax policies that
directly affect consumption and investment which impact AD
Expansionary fiscal policy -ANSWER-Increased government spending
and lower taxes have expansionary effects
