Question : 11) The international trade effect states that A) an increase : 1266940

11) The international trade effect states that

A) an increase in the price level will raise net exports.

B) an increase in the price level will lower net exports.

C) an increase in the price level will raise exports.

D) an increase in the price level will lower imports.

12) Which of the following is one explanation as to why the aggregate demand curve slopes downward?

A) Decreases in the price level raise the interest rate and increase consumption spending.

B) Decreases in the price level raise the interest rate and increase investment spending.

C) Decreases in the U.S. price level relative to the price level in other countries lower net exports.

D) Decreases in the price level raise real wealth and increase consumption spending.

13) An increase in the price level will

A) shift the aggregate demand curve to the left.

B) shift the aggregate demand curve to the right.

C) move the economy up along a stationary aggregate demand curve.

D) move the economy down along a stationary aggregate demand curve.

14) Deflation will

A) increase aggregate demand.

B) increase the quantity of real GDP demanded.

C) decrease aggregate demand.

D) decrease the quantity of real GDP demanded.

15) Spending on the war in Afghanistan is essentially categorized as government purchases.  How do increases in spending on the war in Afghanistan affect the aggregate demand curve?

A) They will move the economy up along a stationary aggregate demand curve.

B) They will move the economy down along a stationary aggregate demand curve.

C) They will shift the aggregate demand curve to the left.

D) They will shift the aggregate demand curve to the right.

16) The recession of 2007-2009 made many consumers pessimistic about their future incomes.  How does this increased pessimism affect the aggregate demand curve?

A) This will move the economy up along a stationary aggregate demand curve.

B) This will move the economy down along a stationary aggregate demand curve.

C) This will shift the aggregate demand curve to the left.

D) This will shift the aggregate demand curve to the right.

17) Higher personal income taxes

A) increase aggregate demand.

B) increase disposable income.

C) decrease aggregate demand.

D) both B and C

18) Which of the following will shift the aggregate demand curve to the right, ceteris paribus?

A) an increase in interest rates

B) a decrease in disposable income

C) a decrease in expected profits for firms

D) an increase in net exports

19) German luxury car exports were hurt in 2009 as a result of the recession.  How would this decrease in exports have affected Germany’s aggregate demand curve?

A) The aggregate demand curve would have shifted to the right.

B) The aggregate demand curve would not have shifted, but there would have been a movement up the aggregate demand curve.

C) The aggregate demand curve would not have shifted, but there would have been a movement down the aggregate demand curve.

D) The aggregate demand curve would have shifted to the left.

20) If the U.S. dollar decreases in value relative to other currencies, how does this affect the aggregate demand curve?

A) This will move the economy up along a stationary aggregate demand curve.

B) This will move the economy down along a stationary aggregate demand curve.

C) This will shift the aggregate demand curve to the left.

D) This will shift the aggregate demand curve to the right.