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 (a)  

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 (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