Aggregate Demand - Knowledge Check

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What is aggregate demand (AD)? Options: The total demand for a product in an industry, The total spending on services in a period of time at a given price level, The willingness and ability to purchase a product at a given price, The total spending on goods and services in a period of time at a given price level

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The total spending on goods and services in a period of time at a given price level

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Which of the following are the correct axis labels for an aggregate demand diagram? y-axis: Average Price Level ($); x-axis: Quantity, y-axis: Real Output; x-axis: Average Price Level ($), y-axis: Average Price Level ($); x-axis: Real Output, y-axis: Quantity; x-axis: Average Price Level ($)

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y-axis: Average Price Level ($); x-axis: Real Output

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Which of the following is not a component of aggregate demand? Government Spending, Consumption, Saving, Investment

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Saving

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Which of these is the formula for aggregate demand? Options: C + I, C + I + G, C + I + G + X, C + I + G + (X - M)

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C + I + G + (X - M)

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Which of these will cause the AD curve to shift to the right? An increase in income tax, An increase in interest rates, An increase in house prices, An increase in consumer uncertainty about the economic future

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An increase in house prices

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Which one of the following will not lead to an increase in investment? A reduction in business taxes, A reduction in business confidence, A reduction in corporate indebtedness, A reduction in interest rates

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A reduction in business confidence

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What are net exports?

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The difference between export revenue and import revenue

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Which of the following would be likely to lead to a fall in the level of exports? An increase in foreign incomes, An increase in inflation rates among trading partners, An increase in free trade, An increase in the exchange rate

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An increase in the exchange rate

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Which of the following would be likely to lead to a fall in the level of imports? An increase in the exchange rate, An increase in tariffs (taxes on imports), An increase in a country's national income (GNI), An increase in the interest rate

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An increase in tariffs (taxes on imports)