Aggregate Demand and Supply Quiz

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.

Which of the following is not included in aggregate demand?

• purchases of stock and bonds

• purchases of services such as visits to the doctor

• purchases of capital goods such as equipment in a factory

• purchases by foreigners of consumer goods produced in the United States

When the price level falls the quantity of

• consumption goods demanded rises, while the quantity of net exports demanded falls.

• consumption goods demanded and the quantity of net exports demanded both rise.

• consumption goods demanded and the quantity of net exports demanded both fall.

• consumption goods demanded falls, while the quantity of net exports demand rises.

Other things the same, as the price level decreases it induces greater spending on

• both net exports and investment.

• net exports but not investment.

• investment but not net exports.

• neither net exports nor investment.

The effect of an increase in the price level on the aggregate-demand curve is represented by a

• shift to the right of the aggregate-demand curve.

• shift to the left of the aggregate-demand curve.

• movement to the left along a given aggregate-demand curve.

• movement to the right along a given aggregate-demand curve.

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.

Changes in the price level affect which components of aggregate demand?

• only consumption and investment

• only consumption and net exports

• only investment

• consumption, investment, and net exports

The model of aggregate demand and aggregate supply explains the relationship between

• the price and quantity of a particular good.

• unemployment and output.

• wages and employment.

• real GDP and the price level.

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 customer abroad want to buy.

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.