Chapter 32 homework--AS/DS

Which of the following would most likely shift the aggregate demand curve to the right? a. an increase in stock prices that increases consumer wealth b. increased fear that a recession will cause workers to lose their jobs c. an increase in personal income tax rates d. a reduction in household borrowing because of tight lending practices

a. an increase in stock prices that increases consumer wealth

Other things equal, a decrease in the real interest rate will: a. expand investment and shift the AD curve to the left b. expand investment and shift the AD curve to the right c. reduce investment and shift the AD curve to the left d. reduce investment and shift the AD curve to the right

b. expand investment and shift the AD curve to the right

Other things equal, a reduction in personal and business taxes can be expected to: a. increase aggregate demand and decrease aggregate supply b. increase both aggregate demand and aggregate supply c. decrease both aggregate demand and aggregate supply d. decrease aggregate demand and increase aggregate supply

b. increase both aggregate demand and aggregate supply

In the diagram, a shift from AS1 to AS3 might be caused by a(n): a. increase in productivity b. increase in the prices of imported resources c. decrease in the prices of domestic resources d. decrease in business taxes

b. increase in the prices of imported resources

If investment increases by $10 billion and the economy's MPC is 0.8, the aggregate demand curve will shift: a. leftward by $50 billion at each price level b. rightward by $10 billion at each price level c. rightward by $50 billion at each price level d. leftward by $40 billion at each price level

c. rightward by $50 billion at each price level

Other things equal, an improvement in productivity will: a. shift the aggregate demand curve to the left b. shift the aggregate supply curve to the left c. shift the aggregate supply curve to the right d. increase the price level

c. shift the aggregate supply curve to the right

The aggregate supply curve (short run): a. slopes downward and to the right b. graphs as a vertical line c. slopes upward and to the right d. graphs as a horizontal line

c. slopes upward and to the right

The determinants of aggregated supply: a. are consumption, investment, government, and net export spending b. explain why real domestic output and the price level are directly related c. explain the three distinct ranges of the aggregate supply curve d. include resource prices and resource productivity

d. include resource prices and resource productivity

An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the: a. net export effect b. wealth effect c. real-balances effect d. multiplier effect

d. multiplier effect

The aggregate demand curve: a. is upsloping because a higher price level is necessary to make production profitable as production costs rise b. is downsloping because production costs decline as real output increases c. shows the amount of expenditures required to induce the production of each possible level of real output d. shows the amount of real output that will be purchased at each possible price level

d. shows the amount of real output that will be purchased at each possible price level