5. Increases and decreases in AD Quiz

Which of the following factors influences consumption demand (C)?

• Technological progress

• Household disposable income

• Capacity utilization

• Government subsidies

What happens to the Aggregate Demand (AD) curve if the government lowers tax rates?

• The AD curve shifts to the left

• The AD curve remains unchanged

• The AD curve shifts to the right

• The AD curve fluctuates randomly

How do lower interest rates affect borrowing and spending?

• They discourage borrowing and spending

• They encourage borrowing and spending

• They have no effect on borrowing and spending

• They only affect borrowing, not spending

What is the effect of higher interest rates on business investments?

• They increase business investments

• They reduce business investments

• They have no effect on business investments

• They only affect consumer spending, not business investments

What does business confidence measure?

• The level of government spending

• How optimistic businesses are about the future

• The amount of technological progress

• The rate of currency exchange

How do lower taxes and higher subsidies impact investment?

• They reduce investment and shift the AD curve to the left

• They increase production costs and shift the AD curve to the left

• They encourage investment and shift the AD curve to the right

• They have no impact on investment

What does government demand represent?

• The total demand for a country's exports minus imports

• The government's spending on goods and services

• The level of business confidence

• The amount of technological progress

Which of the following factors influence net export demand?

• Technological progress and business confidence

• Government spending and taxation

• Tastes and preferences for goods and services, relative incomes, and currency exchange rates

• Capacity utilization and production costs

What happens to the AD curve if a country's currency depreciates?

• The AD curve shifts to the left

• The AD curve shifts to the right

• The AD curve remains unchanged

• The AD curve shifts downward