Lesson 4.2.3.4

4.2.3.4 Possible conflicts between macroeconomic policy objectives Quiz: AQA Economics, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.2.3.4, Possible conflicts between macroeconomic policy objectives: 20 multiple choice questions for the AQA Economics (7136), Unit 2: The national and international economy, written with Revision Ninja.

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The 20 questions

  1. The short-run Phillips curve shows an inverse relationship between inflation and:

    • Exchange rates
    • Unemployment
    • Interest rates
    • Economic growth

  2. What is the shape of the long-run Phillips curve?

    • Downward sloping
    • Upward sloping
    • Horizontal
    • Vertical

  3. At what level of unemployment is the long-run Phillips curve vertical?

    • Zero rate
    • Cyclical rate
    • Maximum rate
    • Natural rate

  4. Which combination of macroeconomic outcomes is linked to a negative output gap?

    • High inflation, high unemployment
    • Low inflation, low unemployment
    • Low inflation, high unemployment
    • High inflation, low unemployment

  5. Which combination of macroeconomic outcomes is linked to a positive output gap?

    • High inflation, high unemployment
    • Low inflation, high unemployment
    • Low inflation, low unemployment
    • High inflation, low unemployment

  6. Which economists argue that major macroeconomic objectives are compatible in the long run?

    • Monetarists
    • Mercantilists
    • Marxists
    • Keynesians

  7. Which trade-off is illustrated by a short-run Phillips curve?

    • Growth and environment
    • Exports and imports
    • Unemployment and inflation
    • Growth and equity

  8. A fall in unemployment alongside rising inflation represents a movement along which curve?

    • Laffer curve
    • Aggregate supply curve
    • Short-run Phillips curve
    • Long-run Phillips curve

  9. What short-run macroeconomic outcome typically results from expansionary demand-side policy?

    • Lower output, lower inflation
    • Higher output, lower inflation
    • Lower output, higher inflation
    • Higher output, higher inflation

  10. If unemployment is held below its natural rate, what happens to inflation over time?

    • Stagflates
    • Remains zero
    • Falls
    • Accelerates

  11. How does a reduction in the natural rate of unemployment affect the long-run Phillips curve?

    • Rotates clockwise
    • Shifts right
    • Shifts left
    • Becomes horizontal

  12. What is the shape of the long-run Phillips curve in monetarist theory?

    • Vertical
    • Horizontal
    • Downward sloping
    • Upward sloping

  13. Which term describes simultaneous high inflation and rising unemployment?

    • Hyperinflation
    • Reflation
    • Disinflation
    • Stagflation

  14. Which policy can lower unemployment in the long run without raising inflation?

    • Protectionist policy
    • Supply-side policy
    • Expansionary fiscal policy
    • Expansionary monetary policy

  15. With high unemployment and low inflation, which demand-side policy is appropriate?

    • Expansionary monetary policy
    • Contractionary fiscal policy
    • Austerity policy
    • Contractionary monetary policy

  16. What prevents macroeconomic policy objectives from being reconciled in the short run?

    • Fixed exchange rates
    • Strict money targets
    • Balanced budgets
    • Policy trade-offs

  17. An increase in inflation expectations shifts the short-run Phillips curve in which direction?

    • Downwards
    • Upwards
    • Leftwards
    • Towards origin

  18. In the AD/AS model, what is the initial impact of a significant increase in government spending?

    • Aggregate demand shifts right
    • Aggregate supply shifts right
    • Aggregate demand shifts left
    • Aggregate supply shifts left

  19. According to monetarists, what shape is the long-run Phillips curve?

    • Downward sloping
    • Upward sloping
    • Vertical
    • Horizontal

  20. What happens to inflation in the short run if aggregate demand pushes unemployment below its natural rate?

    • It turns negative
    • It remains unchanged
    • It increases
    • It decreases

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