Question :
Multiple Choice – Section 03: The Aggregate-Demand Curve
1.Theaggregatedemandandaggregatesupplygraphhasthe
a.quantityofoutputonthehorizontalaxis.OutputisbestmeasuredbyrealGDP.
: 1262134
Multiple Choice – Section 03: The Aggregate-Demand Curve
1.Theaggregatedemandandaggregatesupplygraphhasthe
a.quantityofoutputonthehorizontalaxis.OutputisbestmeasuredbyrealGDP.
b.quantityofoutputonthehorizontalaxis.OutputisbestmeasuredbynominalGDP.
c.quantityofoutputontheverticalaxis.OutputisbestmeasuredbyrealGDP.
d.quantityofoutputontheverticalaxis.OutputisbestmeasuredbynominalGDP.
2.Theaggregate-demandcurveshowsthatadecreaseinthepricelevel
a.decreasesthedollarvalueofgoodsandservicesdemandedintheeconomy.
b.decreasestherealvalueofgoodsandservicesdemandedintheeconomy.
c.increasesthedollarvalueofgoodsandservicesdemandedintheeconomy.
d.increasestherealvalueofgoodsandservicesdemandedintheeconomy.
3.Theaggregate-demandcurve
a.hasaslopethatisexplainedinthesamewayastheslopeofthedemandcurveforaparticularproduct.
b.is verticalinthelongrun.
c.showsaninverserelationbetweenthepricelevelandthequantityofallgoodsandservicesdemanded.
d.Alloftheabovearecorrect.
4.Whichofthefollowingisincludedintheaggregatedemandforgoodsandservices?
a.consumptiondemand
b.investmentdemand
c.netexports
d.Alloftheabovearecorrect.
5.Whichofthefollowingisnotincludedinaggregatedemand?
a.purchasesofstockandbonds
b.purchasesofservicessuchasvisitstothedoctor
c.purchasesofcapitalgoodssuchasequipmentinafactory
d.purchasesbyforeignersofconsumergoodsproducedintheUnitedStates
6.Whenthepricelevelfallsthequantityof
a.consumptiongoodsdemandedrises,whilethequantityofnetexportsdemandedfalls.
b.consumptiongoodsdemandedandthequantityofnetexportsdemandedbothrise.
c.consumptiongoodsdemandedandthequantityofnetexportsdemandedbothfall.
d.consumptiongoodsdemandedfalls,whilethequantityofnetexportsdemandrises.
7.Otherthingsthesame,asthepriceleveldecreasesitinducesgreaterspendingon
a.bothnetexportsandinvestment.
b.netexportsbutnotinvestment.
c.investmentbutnotnetexports.
d.neithernetexportsnorinvestment.
8.Otherthingsthesame,afallinaneconomy’soveralllevelofpricestendsto
a.raiseboththequantitydemandedandsuppliedofgoodsandservices.
b.raisethequantitydemandedofgoodsandservices,butlowerthequantitysupplied.
c.lowerthequantitydemandedofgoodsandservices,butraisethequantitysupplied.
d.lowerboththequantitydemandedandthequantitysuppliedofgoodsandservices.
9.Theeffectofanincreaseinthepricelevelontheaggregate-demandcurveisrepresentedbya
a.shifttotherightoftheaggregate-demandcurve.
b.shifttotheleftoftheaggregate-demandcurve.
c.movementtotheleftalongagivenaggregate-demandcurve.
d.movementtotherightalongagivenaggregate-demandcurve.
10.Whichofthefollowingwouldhelpexplainwhytheaggregatedemandcurveslopesdownward?
a.Anunexpectedlylowpricelevelraisestherealwage,whichcausesfirmstohirefewerworkersandproduceasmallerquantityofgoodsandservices.
b.Alowerpricelevelcausesdomesticinterestratestoriseandtherealexchangeratetoappreciate,whichstimulatesspendingonnetexports.
c.Ahigherpricelevelincreasesrealwealth,whichstimulatesspendingonconsumption.
d.Alowerpricelevelreducestheinterestrate,whichencouragesgreaterspendingoninvestmentgoods.