Chapter 14 Aggregate Demand and Aggregate Supply

| November 9, 2018

27)
Figure 14.1 shows three aggregate demand curves. A movement from curve AD0 to curve AD1 could be caused by a(n)
A)
decrease in the money supply.
B)
decrease in taxes.
C)
decrease in the price level.
D)
decrease in government spending.

28)
Figure 14.1 shows three aggregate demand curves. A movement from curve AD2 to curve AD1 could be caused by a(n)
A)
increase in the money supply.
B)
increase in taxes.
C)
increase in the price level.
D)
increase in government spending.

29)
Figure 14.1 shows three aggregate demand curves. A movement from point b
to point a could be caused by a(n)
A)
decrease in the money supply.
B)
increase in taxes.
C)
increase in the price level.
D)
increase in government spending.

30)
Figure 14.1 shows three aggregate demand curves. A movement from point b
to point c could be caused by a(n)
A)
increase in the money supply.
B)
decrease in taxes.
C)
decrease in the price level.
D)
decrease in government spending.

31)
Assuming the price level has not changed, how would an increase in the
aggregate demand affect real GDP?
A)
It decreases.
B)
It increases.
C)
It only changes with changes in imports.
D)
It only changes with changes in exports.

32)
A decrease in spending on new homes will, other things equal,
A)
increase aggregate demand.
B)
decrease aggregate demand.
C)
increase aggregate supply.
D)
decrease aggregate supply.

33)
Any change in demand from ________ will also change aggregate demand.
A)
households
B)
firms
C)
the foreign sector
D)
all of the above

34)
The relationship between consumer spending and income is known as the
A)
rate of income.
B)
consumption function.
C)
inflation rate.
D)
rate of individual wealth.

35)
When consumers spend and buy things regardless of their level of income, this
is known as
A)
bad financial management.
B)
living the good life.
C)
autonomous consumption spending.
D)
using credit to its maximum.

36)
When consumers realize additional income in a household and spend the
additional monies, the portion of the additional income that is spent is
measured by the
A)
credit increase theory.
B)
marginal propensity to consume.
C)
aggregate demand factor.
D)
measure of individual wealth.

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