IB Macroeconomics - Aggregate demand (AD)

What does the vertical axis represent on the aggregate demand curve?

• Total Input
• Total Output
• Price Level
• Both A&B

Which of the following is not a determinant of aggregate demand ?

• Change in Consumer Spending
• Change in Political Parties
• Change in Government Spending
• Change in investment Spending

The net exports effect suggests that a decrease in Canada's price level relative to other countries will:

• shift the aggregate demand curve leftward.

• shift the aggregate supply curve leftward.

• decrease Canada's exports and increase Canada's imports.

• increase Canada's exports and decrease Canada's imports.

What is represented on the "X" axis on the AD/AS Model?

• price level

• price

• Real GDP

• Nominal GDP

What term best describes the total demand for final goods and services at a range of price levels during a stated period of time?

• Aggregate Supply
• Total Supply
• Total Demand
• Aggregate Demand

What will generally happen to the aggregate demand curve when consumer confidence is too low?

• Curve shifts left
• No change in curve
• Curve slopes up
• curve shifts right

The wealth effect states that higher prices ______ the purchasing power or the real value of the nation's households' wealth and savings.

• increase
• stagnate
• reduce
• double

The relationship between prices and overall demand for goods and services in an economy is

• positive

• negative

When prices increase AD decreases because

• With higher prices people consume less

• With higher prices exports decrease

When prices increase AD decreases because

• With higher prices exports increase

• With higher prices imports increase