Question : 21) When the U.S. price level rises relative to other : 1240519

21) When the U.S. price level rises relative to other nations’ price levels, then

A) U.S. firms’ profits increase and the aggregate demand curve shifts rightward.

B) U.S. exports increase and the aggregate demand curve shifts rightward.

C) U.S. exports decrease, U.S. imports increase, and the aggregate demand curve shifts leftward.

D) U.S. exports decrease, U.S. imports increase, and there is a movement upward along the aggregate demand curve.

E) U.S. exports decrease, U.S. imports increase, and the aggregate demand curve shifts rightward.

22) Sherri lives in Canada and is considering buying a new sofa. If the price level in Canada falls and the price level in the United States does not change, Canadian manufactured sofas are relatively

A) more expensive, so Sherri will likely purchase a U.S. manufactured sofa.

B) more expensive, so Sherri will likely purchase a Canadian manufactured sofa.

C) less expensive, so Sherri will likely purchase a U.S. manufactured sofa.

D) less expensive, so Sherri will likely purchase a Canadian manufactured sofa.

E) Both answers B and D could be correct depending on whether U.S. manufactured sofas were initially more expensive or less expensive than Canadian sofas.

23) When the domestic price level increases, exports decrease and imports increase. Other things the same, this change is illustrated by a

A) movement upward along the aggregate demand curve.

B) movement downward along the aggregate demand curve.

C) rightward shift of the aggregate demand curve.

D) leftward shift of the aggregate demand curve.

E) rightward shift of the aggregate supply curve.

24) The aggregate demand curve shifts when any of the following factors change EXCEPT

A) foreign income.

B) the price level.

C) monetary policy.

D) expectations about the future.

E) fiscal policy.

25) Which of the following does NOT shift the aggregate demand curve?

A) a change in the money wage

B) a change in expectations about the future

C) a change in monetary policy

D) a change in fiscal policy

E) a change in foreign income

26) All of the following shift the aggregate demand curve to the right EXCEPT

A) an increase in taxes.

B) an expansion of the global economy.

C) an increase in foreign income.

D) an increase in government expenditure.

E) an increase in expected future profit.

27) All of the following actions shift the aggregate demand curve to the right EXCEPT

A) the Fed raises the interest rate.

B) an increase in government transfer payments.

C) inflation is expected to rise next year.

D) an increase in expected future profit.

E) a decrease in taxes.

28) If there is an increase in expected future income, then

A) the aggregate demand curve shifts rightward.

B) the aggregate demand curve shifts leftward.

C) there is an upward movement along the aggregate demand curve.

D) there is a downward movement along the aggregate demand curve.

E) the aggregate demand curve becomes steeper.

29) Aggregate demand

A) decreases if expected future income rises.

B) increases if the exchange rate rises.

C) increases if government expenditures decrease.

D) increases if the expected inflation rate increases.

E) increases if aggregate supply increases.

30) Aggregate demand ________ if the expected inflation rate increases because ________.

A) increases; people expect to receive cost of living raises as the inflation begins

B) decreases; people wait for the exchange rates to change before making purchases

C) does not change; inflation does not affect the aggregate demand curve

D) increases; people want to make purchases now before the price of goods and services begin to increase

E) decreases; people want to wait for the price of goods and services begin to decrease