Understanding Aggregate Demand Concepts

Which of the following best describes aggregate demand in an economy?

• The total supply of goods and services produced within an economy.

• The total demand for goods and services within an economy at a given overall price level and in a given time period.

• The demand for a single product or service in a specific market.

• The total amount of money in circulation within an economy.

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DOK Level 2: Skill/Concept

If the aggregate demand curve shifts to the right, which of the following is most likely to occur?

• A decrease in the overall price level.

• An increase in the overall price level.

• A decrease in the quantity of goods and services demanded.

• A decrease in consumer spending.

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DOK Level 2: Skill/Concept

• Total consumption.

• Net exports.

• Government spending.

• Investment.

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DOK Level 2: Skill/Concept

Which of the following factors would cause a leftward shift in the aggregate demand curve?

• An increase in consumer confidence.

• A decrease in interest rates.

• An increase in taxes.

• An increase in government spending.

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DOK Level 2: Skill/Concept

In the context of an aggregate demand graph, what does the horizontal axis typically represent?

• The overall price level.

• The quantity of goods and services demanded.

• The level of employment.

• The interest rate.

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DOK Level 2: Skill/Concept

Which of the following scenarios would most likely lead to a rightward shift in the aggregate demand curve?

• A decrease in consumer wealth.

• An increase in the national unemployment rate.

• A decrease in the value of the domestic currency.

• An increase in the savings rate.

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DOK Level 2: Skill/Concept

How does an increase in government spending affect the aggregate demand curve?

• It shifts the aggregate demand curve to the left.

• It shifts the aggregate demand curve to the right.

• It causes a movement along the aggregate demand curve.

• It has no effect on the aggregate demand curve.

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DOK Level 2: Skill/Concept

Which of the following is a component of aggregate demand?

• Savings.

• Imports.

• Exports.

• Taxes.

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DOK Level 2: Skill/Concept

What is the effect of a decrease in interest rates on aggregate demand?

• It decreases aggregate demand by reducing consumer spending.

• It increases aggregate demand by encouraging investment.

• It has no effect on aggregate demand.

• It decreases aggregate demand by increasing savings.

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DOK Level 2: Skill/Concept

Which of the following would most likely cause a movement along the aggregate demand curve rather than a shift of the curve?

• A change in consumer income.

• A change in the overall price level.

• A change in government policy.

• A change in foreign exchange rates.

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DOK Level 2: Skill/Concept