Understanding Aggregate Demand Components

What does "AD" stand for in economic terms?

• Aggregate Demand

• Average Demand

• Annual Demand

• Adjusted Demand

Which of the following is a component of Aggregate Demand (AD)?

• Government Spending

• Taxation

• Inflation Rate

• Exchange Rate

Which component of AD is directly affected by changes in interest rates?

• Consumption

• Investment

• Government Spending

• Net Exports

How does an increase in consumer confidence affect Aggregate Demand?

• It decreases AD

• It increases AD

• It has no effect on AD

• It stabilises AD

Which external factor can influence the net exports component of AD?

• Domestic Inflation

• Foreign Exchange Rates

• Local Tax Policies

• National Debt

What is the effect of a decrease in government spending on AD?

• AD increases

• AD decreases

• AD remains unchanged

• AD fluctuates

Which of the following is NOT a component of Aggregate Demand?

• Consumption

• Investment

• Savings

• Net Exports

How does a rise in income tax affect the consumption component of AD?

• Increases consumption

• Decreases consumption

• No effect on consumption

• Stabilises consumption

What happens to AD if there is a significant increase in exports?

• AD decreases

• AD increases

• AD remains unchanged

• AD fluctuates

Which of the following can cause a shift in the AD curve to the right?

• Increase in interest rates

• Increase in consumer spending

• Decrease in government spending

• Decrease in exports