CIA4U Aggregate Demand #2

What is aggregate demand?

• The total demand for goods and services in an economy at a given time.

• The demand for a single product.

• The supply of goods and services.

• The total income of consumers.

Aggregate demand is the total demand for goods and services in an economy at a given time. Which of the following factors can cause a shift in aggregate demand?

• A) Changes in consumer spending

• B) Changes in government policy

• C) Changes in foreign exchange rates

• D) All of the above.

What is the definition of aggregate demand (AD)?

• Total supply of goods and services

• Total demand for goods and services

• Total production of goods and services

• Total consumption of goods and services

Which of the following is a component of aggregate demand (AD)?

• Consumption

• Investment

• Government Spending

• All of the above.

The AD curve is downward sloping because: A) Higher prices lead to higher demand B) Lower prices lead to higher demand C) Higher prices lead to lower demand D) Prices do not affect demand.

• Higher prices lead to higher demand

• Lower prices lead to higher demand

• Higher prices lead to lower demand

• Prices do not affect demand.

Contrast the AD curve with individual demand curves.

• A) AD curve is for a single product

• B) AD curve is for the entire economy

• C) Individual demand curves are for the entire economy

• D) There is no difference.

Differentiate between movement along and shifts of AD.

• Movement is due to price changes, shifts are due to other factors

• Shifts are due to price changes, movement is due to other factors

• Both are due to price changes

• Both are due to other factors.

Show movements of and shifts in AD on a graph with proper labels.

• Movement is a shift to the right

• Movement is a shift to the left

• Movement is along the curve, shifts are shifts of the curve

• Movement is a vertical shift.

The factors that shift AD due to changes in C, I, G, and NX are:

• A) Price changes

• B) Non-price factors

• C) Only government policies

• D) Only consumer preferences.

What is the term used to describe the change in consumer spending that results from a change in the value of assets?

• Interest rate effect

• Wealth effect

• Net export effect

• Disposable income