Understanding Aggregate Demand Concepts

Which of the following best describes Aggregate Demand (AD) in an economy?

• The total supply of goods and services produced within an economy at a given overall price level and in a given time period.

• The total demand for goods and services within an economy at a given overall price level and in a given time period.

• The total amount of money in circulation within an economy.

• The total amount of goods and services that households are willing to purchase at a given price level.

Which of the following factors would cause a rightward shift in the Aggregate Demand curve?

• An increase in interest rates.

• A decrease in consumer confidence.

• An increase in government spending.

• A decrease in the money supply.

• Net exports.

• Net imports.

• Total consumption.

• Total investment.

• 500

• 600

• 700

• 800

Which of the following graphs correctly represents a typical Aggregate Demand curve?

• A vertical line.

• A horizontal line.

• A downward sloping line from left to right.

• An upward sloping line from left to right.

What is the effect on the Aggregate Demand curve if there is a significant increase in consumer wealth?

• The AD curve shifts to the left.

• The AD curve shifts to the right.

• The AD curve becomes steeper.

• The AD curve becomes flatter.

Which of the following would likely cause a leftward shift in the Aggregate Demand curve?

• A decrease in taxes.

• An increase in consumer savings.

• An increase in exports.

• A decrease in interest rates.

Which of the following scenarios would most likely lead to a decrease in Aggregate Demand?

• A technological advancement that increases productivity.

• A decrease in the price of raw materials.

• A significant increase in the national unemployment rate.

• An increase in foreign demand for domestic goods.

If the government implements a policy that increases taxes, what is the likely impact on the Aggregate Demand curve?

• The AD curve shifts to the right.

• The AD curve shifts to the left.

• The AD curve becomes steeper.

• The AD curve becomes flatter.

What happens to the Aggregate Demand curve if there is a decrease in consumer confidence?

• The AD curve shifts to the right.

• The AD curve shifts to the left.

• The AD curve becomes steeper.

• The AD curve becomes flatter.