Aggregate Demand

Which of the following explains the slope of the aggregate demand curve?

I. the wealth effect of a change in aggregate price level

II. the interest rate effect of a change in the aggregate price level

III. the product-substitution effect of a change in the aggregate price level

• I only

• II only

• III only

• I and II only

• I, II, and III

Decreases in the stock market decrease aggregate demand by decreasing which of the following?

• consumer wealth

• the price level

• the stock of existing capital goods

• interest rates

• tax revenues

Which of the following government policies will shift the aggregate demand curve to the left?

• a decrease in the quantity of money

• an increase in government purchases of goods and services

• a decrease in taxes

• a decrease in interest rates

• an increase in government transfers

Which of the following will occur if the government reduces defense spending?

• aggregate demand will increase

• aggregate demand will decrease

• there will be no change in aggregate demand or supply

• aggregate supply will increase

• aggregate supply will decrease

Which of the following will occur if an increase in interest rates leads to a decrease in investment spending?

• aggregate demand will increase

• aggregate demand will decrease

• there will be no change in aggregate demand or supply

• aggregate supply will increase

• aggregate supply will decrease

As a result of the wealth effect, a higher aggregate price level will reduce which of the following?

• households' purchasing power

• interest rates

• investment spending

• nominal wages

• aggregate demand

An increase in which of the following will increase aggregate demand?

• taxes

• government spending

• the federal funds rate

• reserve requirements

• the discount rate

An increase in the international value of the United States dollar will tend to cause U. S. exports to

• fall and aggregate demand to increase.

• rise and aggregate demand to increase.

• fall and aggregate demand to decrease.

• rise and aggregate demand to decrease.

• not change and aggregate demand to not change.

Which of the following changes would cause an economy’s Aggregate Demand curve to shift to the right?

• an increase on import spending

• an increase in autonomous consumer spending

• an increase in interest rates

• a decrease in the money supply

• a decrease in the overall price level of the economy

Aggregate Demand may be measured by adding

• consumption, savings, investment, and imports

• savings, government spending, and business inventories

• consumption, investment, government spending, and net exports

• domestic private expenditures and government spending

• domestic expenditure and imports