Aggregate Demand MC Practice

What is the quantity of output demanded if the price level is 120?

• $9 trillion.

• $10 trillion.

• $11 trillion.

• $12 trillion.

If prices are constant, but there is an increase in the value of financial assets:

• aggregate demand shifts to the left

• aggregate demand shifts to the right.

• there is a movement down the aggregate demand curve.

Raising income taxes shifts the:

• aggregate demand curve to the left.

• aggregate demand curve to the right.

• there is a movement down the aggregate demand curve.

An increase in government spending on health care is likely to shift the:

• aggregate demand curve to the left.

• aggregate demand curve to the right.

• there is a movement down the aggregate demand curve.

As a result of a decrease in the value of the dollar in relation to other currencies, American imports decrease and exports increase. Consequently, there is a(n):

• increase in aggregate demand. (right shift)

• decrease in the quantity of aggregate output demanded. (movement along the curve)

• decrease in aggregate demand (left shift)

A shift from AD1 to AD2 may have been the result of:

• an increase in government spending.

• a decrease in investment spending.

• increases in personal income taxes.

• a decrease in value of consumer wealth.

• falling net exports.

Suppose that consumer expectations about the future improve. How will this affect the aggregate demand curve?

• Aggregate demand shifts to the left.

• There will be a movement upward along the fixed aggregate demand curve.

• Aggregate demand shifts to the right.

• There will be a movement downward along the fixed aggregate demand curve.

The negative relationship between the aggregate price level and aggregate output demanded gives the aggregate demand curve:

• 1. an upward slope.

• 1. a vertical slope.

• 1. a horizontal slope.

• 1. a downward slope.

According to the wealth effect, when the price level decreases, the purchasing power of assets:

• 1. increases and consumer spending increases.

• 1. increases and consumer spending decrease

• 1. decreases and consumer spending increases.

• 1. remains constant and consumer spending is unchanged.

When the aggregate price level rises, other things equal, this will:

• lead to a rightward shift in the AD curve.

• lead to a leftward shift in the AD curve.

• result in an increase in the quantity of aggregate output demanded.

• result in a decrease in the quantity of aggregate output demanded.

• result in a decrease in the quantity of aggregate output supplied.