Question : 51) In the figure above, the shift in the aggregate : 1227895

 

 

51) In the figure above, the shift in the aggregate demand curve from AD1 to AD2 could be result of

A) a fall in the price level.

B) a decrease in the quantity of money.

C) an increase in government expenditures on goods and services.

D) an increase in taxes.

E) a rise in the price level.

52) In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of

A) a decrease in the real interest rate.

B) a decrease in the buying power of money.

C) an increased expectation of a recession that lowers the expected rate of profit from investment.

D) a decrease in the foreign exchange rate.

E) an increase in the price level.

 

53) In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of

A) a fall in the price level.

B) a tax cut.

C) an increased expectation of a recession that lowers people’s expected future incomes.6

D) a decrease in the foreign exchange rate.

E) a rise in the price level.

 

54) In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of an increase in

A) expected future income.

B) the foreign exchange rate.

C) foreign incomes.

D) the price level.

E) aggregate supply.

55) A change in any component of aggregate demand creates a larger change in overall aggregate demand. This is the ________ effect, and it means , for example, that a ________ in consumption will cause an even larger ________ in AD.

A) multiplier; increase; decrease

B) liquidity; decrease; decrease

C) growth; increase; decrease

D) multiplier; decrease; decrease

E) liquidity; increase; decrease

 

56) The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced

A) increase in consumption expenditure.

B) increase in production expenditure.

C) increase in government expenditures on goods and services.

D) decrease in the price level.

E) increase in exports.

 

57) Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure

A) shifts the aggregate demand curve by more than $10 billion.

B) shifts the aggregate demand curve by $10 billion.

C) shifts the aggregate demand curve by less than $10 billion.

D) changes the slope of the aggregate demand curve so it is less steep.

E) changes the slope of the aggregate demand curve so it is steeper.

58) If investment spending increases by $1 million, then the aggregate demand curve shifts

A) rightward by $1 million.

B) rightward by more than $1 million.

C) rightward by less than $1 million.

D) leftward by more than $1 million.

E) leftward by less than $1 million.

 

59) When the price level rises there is a ________ the aggregate demand curve.

A) rightward shift of

B) movement down along

C) leftward shift of

D) movement up along

E) rotation of

 

60) A rise in the price level

A) raises the buying power of money.

B) decreases the prices of exports.

C) lowers the buying power of money.

D) increases aggregate demand.

E) makes the aggregate demand curve steeper.

 

61) When the price level rises, the real interest rate ________ and the quantity of real GDP demanded ________.

A) rises; increases

B) rises; decreases

C) falls; increases

D) falls; decreases

E) does not change; does not change

62) A change in any of the following factors EXCEPT ________ shifts the aggregate demand curve.

A) expectations about the future

B) the money wage rate

C) monetary and fiscal policy

D) foreign income

E) the foreign exchange rate

 

63) Which of the following shifts the aggregate demand curve leftward?

A) a decrease in government expenditure on goods and services

B) an increase in the price level

C) a tax cut

D) an increase in foreign income

E) a decrease in the price level

 

64) When investment increases, the ________ in aggregate demand is ________ the change in investment.

A) increase; greater than

B) increase; smaller than

C) increase; the same as

D) decrease; the same as

E) decrease; greater than