Aggregate Demand and Aggregate Supply

Aggregate demand consists of

• the quantity of real output that consumers want to buy at different prices

• the quantity of real output that consumers and producers want to buy at different price levels

•   the quantity of real output that all buyers in an economy want to buy at different price levels

• the quantity of real output produced in an economy at different price levels

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

• consumption and investment spending

• government spending

• import minus export spending

• net export spending

A leftward shift in the aggregate demand curve may occur as a result of

•    falling interest rates that lower the cost of borrowing

•      decreases in income and business taxes that increase after tax incomes and profit

• falling consumer and corporate indebtedness

• worsening consumer and business confidence

A rightward shift in the aggregate demand curve may occur as a result of

•   increases in interest rates that raise the cost of borrowing

•      an improvement in technology that increases investment spending

•      increases in income and business taxes that reduce incomes and profits

• a government decision to reduce spending on education

The total quantity of goods and services produced in any economy at different prices levels is shown by the

• AD curve

• aggregate expenditure curve

• AS curve

• PPC

The LRAS curve

• is not affected by changes in aggregate demand

•   is vertical at the level of potential or full employment output

• reflects the idea that in the long run, output is independent of the price level

• all of the above

The short-run aggregate supply curve shows that

•    as the price level falls, firms produce more output

•      as the price level increases, firms produce less output

•      as the price level increases, firms produce more output

•    output produced by firms is independent of the price level

When equilibrium real GDP is less than the full employment level of real GDP, the economy is probably experiencing

• an inflationary gap

• inflation

• a deflationary gap

• a fall in unemployment

  When short-run aggregate supply increases, the SRAS curve

• shifts upward

• shifts to the left

• shifts to the right

• remains constant

Which of the following can cause a rightward shift of the SRAS curve?

• a fall input prices

• a rise in input prices

• an increase in costs of production

• a negative supply shock