Aggregate Demand and Aggregate Supply Quiz

What is the slope of the aggregate demand curve?

• Positive

• Negative

• Zero

• Undefined

Which of the following can cause aggregate demand to increase?

• Decrease in household wealth

• Decrease in consumer confidence

• Increase in business confidence

• Increase in taxes

What happens to aggregate demand when the Federal Reserve lowers interest rates?

• It decreases

• It remains unchanged

• It increases

• It fluctuates

What is the effect of a decrease in consumer confidence on aggregate demand?

• It increases

• It decreases

• It remains unchanged

• It fluctuates

What happens to real GDP when aggregate demand increases?

• It decreases

• It remains unchanged

• It increases

• It fluctuates

Which of the following is NOT a factor that decreases aggregate demand?

• Decrease in household wealth

• Increase in consumer confidence

• Increase in taxes

• Decrease in government spending

Which of the following can cause aggregate demand to shift to the right?

• Decrease in household wealth

• Decrease in consumer confidence

• Increase in government spending

• Increase in taxes

When aggregate demand decreases, what tends to happen to real GDP and the overall price level?

• Both increase

• Real GDP increases, price level decreases

• Both decrease

• Real GDP decreases, price level increases

Which of the following causes the aggregate supply curve to increase, shifting to the right?

• Increase in the price of oil

• Decrease in productivity

• Improvement in technology

• Increase in tariffs

What happens to the economy if the aggregate supply curve increases, assuming everything else is constant?

• Economy grows slower, inflation rises

• Economy grows faster, inflation declines

• Economy shrinks, inflation remains constant

• Economy remains constant, inflation declines