Question : 9) By analyzing aggregate demand through its component parts, we : 1373906

 

9) By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the price level causes

A) a decline in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demand.

B) a decline in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demand.

C) an increase in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demand.

D) an increase in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demand.

10) By looking at aggregate demand via its component parts, we can conclude that the aggregate demand curve is downward sloping because

A) a lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending.

B) a lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in nominal terms, causes the interest rate to rise, and stimulates planned investment spending.

C) a higher price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending.

D) a higher price level, holding the nominal quantity of money constant, leads to a smaller quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending.

 

11) By looking at aggregate demand through its component parts, we can conclude that a ________ price level ________ the real quantity of money, ________ higher spending.

A) lower; expands; encouraging

B) higher; contracts; encouraging

C) lower; contracts; discouraging

D) higher; expands; encouraging

 

12) By analyzing aggregate demand via its component parts, we can conclude that changes in the money supply

A) have no effect on aggregate demand.

B) affect aggregate demand in the opposite direction of the change in government spending.

C) affect aggregate demand in the same direction as the change in government spending.

D) affect the quantity of aggregate output demand.

 

13) Everything else held constant, an increase in government spending ________ aggregate ________.

A) increases; demand

B) decreases; demand

C) decreases; supply

D) increases; supply

14) Everything else held constant, a decrease in government spending ________ aggregate ________.

A) increases; demand

B) decreases; demand

C) decreases; supply

D) increases; supply

 

15) Everything else held constant, a decrease in net taxes ________ aggregate ________.

A) increases; demand

B) decreases; demand

C) decreases; supply

D) increases; supply

 

 

 

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