Aggregate Supply & Demand

Which of the following equations represents Aggregate Demand

• GDP = X + I + C + (Y - Z)

• GDP = C + I + G + (X - M)

• GDP = C + I + X + (G - T)

• GDP = (1/MPS)*G + I + C

Which of the following events will increase the Aggregate Demand in the economy. Check all that apply.

• The government increasing Income Tax

• The Fed lowering interest rates

• A rise in the cost of raw material

• A supply shock like a new production technology

• An increase in consumer confidence

The amount of money that companies pay to maintain or replace its existing capital is called ______________

Consumption in the economy depends on all these factors EXCEPT.

• Corporate Taxes

• Consumer Confidence

• Income Tax

• Interest Rates

If a country imports more than it exports, it is experiencing a _______________

• Budget Surplus

• Budget Deficit

• Trade Surplus

• Trade Deficit

Which of the following are examples of automatic stabilizers (check all that apply)

• Progressive Income Tax

• Unemployment Compensation

• Balanced Budget Ammendment

• Spending on a Military Conflict

• Welfare Payments

If the government lowers taxes and increases spending, this is likely to lead to ___________ inflation

• Public-pushed

• Demand-pulled

• Cost-pushed

• Hyperinflation

Following a recession real GDP is typically below potential GDP and the economy is experiencing a ____________ Gap

A strong rise in energy cost is likely to lead to

• A rise in real GDP and the price level

• A fall in GDP and the price level

• A fall in real GDP but a rise in the price level

• A rise in real GDP but a fall in the price level

Which of these actions can the government take to slow down a demand-pulled inflation (check all that apply)?

• Increase government spending

• Print more money

• Raise taxes

• Issue stimulus checks

• Raise interest rates