Understanding Aggregate Supply and Demand

What does aggregate demand represent in an economy?

• The total supply of goods and services produced

• The total demand for goods and services at different price levels

• The demand for a single product

• The total amount of money in circulation

Which of the following is a component of aggregate demand?

• Net exports

• Aggregate supply

• Money supply

• Labor force

Aggregate supply refers to:

• The total amount of goods and services that firms are willing to produce at different price levels

• The total demand for goods and services

• The total government spending

• The total imports in an economy

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

• Change in consumer confidence

• Change in the price of a single good

• Change in the weather

• Change in the number of firms

The business cycle is best described as:

• Fluctuations in economic activity over time

• The process of starting a business

• The cycle of product development

• The movement of goods in a supply chain

Which phase of the business cycle is characterized by rising GDP and employment?

• Expansion

• Recession

• Trough

• Contraction

A leftward shift in the aggregate supply curve indicates:

• A decrease in total production at every price level

• An increase in total production at every price level

• No change in production

• An increase in aggregate demand

Which of the following is NOT a component of aggregate demand?

• Consumption

• Investment

• Government spending

• Aggregate supply

What is the formula for aggregate demand?

Which of the following would cause the aggregate demand curve to shift to the right?

• Increase in consumer income

• Decrease in government spending

• Increase in taxes

• Decrease in investment