Aggregate Demand and Supply Quiz

The aggregate demand and aggregate supply graph has

• quantity of output on the horizontal axis. Output can be measured by the GDP deflator.

• quantity of output on the horizontal axis. Output can be measured by real GDP.

• quantity of output on the vertical axis. Output can be measured by the GDP deflator.

• quantity of output on the vertical axis. Output can be measured by real GDP.

The aggregate-demand curve shows the

• quantity of labor and other inputs that firms want to buy at each price level.

• quantity of labor and other inputs that firms want to buy at each inflation rate.

• quantity of domestically produced goods and services that households want to buy at each price level.

• quantity of domestically produced goods and services that households, firms, the government, and customers abroad want to buy at each price level.

Aggregate demand includes

• both the quantity of goods and services the government and customers abroad want to buy.

• neither the quantity of goods and services the government wants to buy nor the quantity of goods and services customers abroad want to buy.

• the quantity of goods and services the government wants to buy, but not the quantity of goods and services customers abroad want to buy.

• the quantity of goods and services customers abroad want to buy, but not the quantity of goods and services the government wants to buy.

Aggregate demand includes

• only the quantity of goods and services households want to buy.

• only the quantity of goods and services households and firms want to buy.

• only the quantity of goods and services households, firms, and the government want to buy.

• the quantity of goods and services households, firms, the government, and customers abroad want to buy.

The aggregate demand and aggregate supply graph has the

• quantity of output on the horizontal axis. Output is best measured by real GDP.

• quantity of output on the horizontal axis. Output is best measured by nominal GDP.

• quantity of output on the vertical axis. Output is best measured by real GDP.

• quantity of output on the vertical axis. Output is best measured by nominal GDP.

The aggregate-demand curve shows that a decrease in the price level

• decreases the dollar value of goods and services demanded in the economy.

• decreases the real value of goods and services demanded in the economy.

• increases the dollar value of goods and services demanded in the economy.

• increases the real value of goods and services demanded in the economy.

Which of the following is included in the aggregate demand for goods and services?

• consumption demand

• investment demand

• net exports

• All of the above are correct.

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

• the slope of short-run aggregate supply.

• the slope of long-run aggregate supply.

• the slope of the aggregate-demand curve.

• everything that makes the aggregate-demand curve shift.

When the price level changes, which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

• the real value of wealth

• the interest rate

• the value of currency in the market for foreign exchange

• All of the above are correct.

If the price level falls, the real value of a dollar

• rises, so people will want to buy more.

• rises, so people will want to buy less.

• falls, so people will want to buy more.

• falls, so people will want to buy less.