Aggregate Supply & Aggregate Demand Development

When taxes decrease, consumption

• increases, so aggregate demand shifts right

• increases, so aggregate supply shifts right

• decreases, so aggregate demand shifts left

• decreases, as aggregate supply shifts left

Consumption would decrease and aggregate demand would shift

• right if taxes increase

• right if taxes stabilize

• left if taxes increased

• left if taxes decreased

Which of the following shifts aggregate demand to the right?

• An increase in the money supply

• An increase in net exports at every exchange rate

• An investment tax credit

• All of the above are correct

Which of the following shifts aggregate supply to the right?

• A decrease in the money supply

• Technology that increases the profitability of goods

• the repeal of an investment tax credit

• A decrease in the price level

Which of the following shifts aggregate demand to the right?

• Congress reduces purchases of new weapons systems

• The FED buys bonds in the open market

• The price level falls

• Net Exports fall

When the government spends more, the initial effect is that

• aggregate demand shifts right

• aggregate demand shifts left

• aggregate supply shifts right

• aggregate supply shifts left

Aggregate demand shifts left when the government

• Decreases taxes

• Cuts military expenditures

• Both of the above are correct

• None of the above is correct

Aggregate demand shifts right when the government

• Lowers personal income taxrs

• Increases the money supply

• Repeals an investment tax credit

• All of the above are correct

Aggregate demand would shift right if either

• Price Level decreased, or government expenditures increased

• Price Level decreases, or government instituted a tax credit

• Government expenditures or the money supply increased

If countries that imported from the US went into a recession, U.S. net exports would

• rise, making aggregate demand shift right

• rise, making aggregate demand shift left

• fall, making aggregate demand shift right

• fall, making aggregate demand shift left