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Exam 12: B: Aggregate Demand and Aggregate Supply

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Question 71

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When the price level decreases:

A) the demand for money falls and the interest rate falls.
B) holders of financial assets with fixed money values decrease their spending.
C) holders of financial assets with fixed money values have less purchasing power.
D) there is a decrease in consumer spending that is sensitive to changes in interest rates.

E) B) and D)
F) A) and B)

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Question 72

Multiple Choice

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Which of the above diagrams best portrays the effects of an increase in foreign spending on our products?

A) A
B) B
C) C
D) D

E) A) and D)
F) None of the above

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Question 73

Multiple Choice

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A change in aggregate supply would be caused by a change in:

The relationship between the price level and the amount of real GDP is:

If the current price level was such that the aggregate quantity demanded exceeded the aggregate quantity supplied, we would expect:

A n expected rise in the rate of inflation for consumer goods will:

A factor that shifts the aggregate demand curve for an economy is:

An increase in taxes will cause a(n) :

An increase in aggregate demand is most likely to be caused by a decrease in:

The following table shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the above table.If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Refer to the above diagrams.A decline in aggregate expenditures from AE₂ to AE₁resulting from the wealth, interest rate, and foreign trade effects would be depicted as:

A decrease in consumer spending can be expected to shift the:

Refer to the diagram given below.There are two panels in the diagram. Assuming a constant price level, an increase in the aggregate expenditures schedule from AE₁ to AE₂ would:

The shape of the aggregate demand curve is explained by the:

The following table shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the above table.The equilibrium price level and quantity of real domestic output will be:

In terms of aggregate supply, the difference between the long run and the short run is that in the long run:

Refer to the information below.Investment spending would most likely be influenced by changes in: The following list of factors, are related to the aggregate demand curve.Real-balances effect Household expectations Interest-rate effect Personal income tax rates Profit expectations National income abroad Government spending Foreign trade effect Exchange rates Degree of excess capacity

Other things equal, appreciation of the dollar:

The short-run aggregate supply curve is upward-sloping because:

The foreign trade effect suggests that an increase in the Canadian price level relative to other countries will: