1. 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

Refer to the above diagram. If the initial aggregate demand and supply curves are AD₀ and AS₀, the initial equilibrium price level and real output GDP will be:

• F and C, respectively.

• G and B, respectively.

• F and A, respectively.

• E and B, respectively.

If exports from New Zealand increased, what would most likely happen to real gross domestic product and price level?

Real GDP / Price Level

• decrease/decrease

• increase/increase

• decrease/increase

• increase/no chanve

Point A is the initial economic equilibrium and then the economy moves to point B, this is described as a:

• Shift of the AD curve

• Shift along the AD curve

• Shift of the AS curve

• Shift along the AS curve

What is represented on the x-axis on the AD/AS Model?

• Price Level

• Growth

• Real Output GDP

• Nominal GDP

What would cause AD to decrease?

• an increase in tax rates

• a decrease tax rates

• an increase in government spending

• keeping government spending constant

If exports from New Zealand increased, what would most likely happen to Real Output GDP and price level?

Real GDP / Price Level

• decrease/decrease

• increase/increase

• decrease/increase

• increase/no change

What would be the effect of an increase in imports?

• Increase AD
• Decrease AD
• Increase SRAS
• Decrease SRAS

The only government policy with an immediate effect on the AD curve is

• changing income tax rates.

• changing business tax rates.

• changing government spending.

• changing government transfer payments.

• changing the supply of money.