Tackle the Test: Free-Response Questions

1. Question

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   Rubric for FRQ 1 (9 points)

   

   1 point: Graph labeled “Aggregate price level” or “PL” on the vertical axis and “Real GDP” on the horizontal axis

   1 point: AD downward-sloping and labeled

   1 point: SRAS upward-sloping and labeled

   1 point: LRAS vertical and labeled

   1 point: Potential output labeled at horizontal intercept of LRAS

   1 point: Long-run macroeconomic equilibrium aggregate price level labeled on vertical axis at intersection of SRAS, LRAS, and AD

   1 point: Leftward shift of the SRAS curve

   1 point: Higher equilibrium aggregate price level at new intersection of SRAS and AD

   1 point: This could be caused by anything that would shift the short-run aggregate supply curve to the left, such as an increase in the price of energy, labor, or another input with economy-wide importance.

2. Question

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