Economics Chapter 7

The amount of real domestic output that will be purchased at each possible price level is best shown by the:

Aggregate demand curve

If the dollar appreciates in value relative to foriegn currencies:

Aggregate demand decreases

When national income in other nations increases:

Aggregate demand increases

A change in aggregate supply would be caused by a change in:

An aggregate supply determinant

Which of the following will cause the aggregate demand curve to shift to the left?

An appreciation in the value of the U.S. dollar

Which would be one of the factors that increase aggregate demand?

An increase in consumer wealth

Which combination of factors would most likely increase aggregate demand?

An increase in consumer wealth and a decrease in interest rates

Which set of events would most likely increase aggregate demand?

An increase in incomes in foreign nations and a depreciation of the dollar

Which of the following will lead to an increase in aggregate demand?

An increase in national incomes abroad

Which set of events would most likely decrease aggregate demand?

An increase in personal income tax rates

Which would most likely increase aggregate supply?

An increase in productivity

The slope of the immediate-short-run aggregate supply curve is based on the assumption that:

Both input and output prices are fixed

If the prices of imported resources increase, then this event would most likely:

Decrease aggregate supply

A decrease in government spending will cause a(n):

Decrease in aggregate demand

A decrease in net exports will cause a(n):

Decrease in aggregate demand

The excess capacity of business rises due to:

Demand decreases

When national income in other nations decreases, aggregate:

Demand decreases

If the dollar depreciates in value relative to foreign currencies. aggregate:

Demand increases

The short-run aggregate supply curve shows the:

Direct relationship between the price level and real GDP produced

When the price level falls:

Holders of financial assets with fixed money values increase their spending

If the U.S. dollar depreciates in value relative to foreign currencies then this will:

Increase aggregate demand

An increase in government spending will cause a(n):

Increase in aggregate demand

A decline in the quantity of real output demanded along the aggregate demand curve is a result of a(n):

Increase in the price level

If Congress raised taxes on businesses, this action would:

Increase per-unit production costs and thus decrease aggregate supply

The aggregate demand curve shows the:

Inverse relationship between the price level and real GDP purchased

An aggregate supply curve shows the:

Level of real domestic output which will be produced at each possible price level

Which would shift the aggregate demand curve? A change in:

Net exports spending

The upward slope of the short-run aggregate supply curve is based on the assumption that:

Nominal wages and other resource costs do not respond to price level changes

The aggregate demand curve is the relationship between the:

Price level and the purchasing of real domestic output

Which would most likely shift the aggregate supply curve? A change in:

Prices of imported resources

Which would be one of the factors that shift the aggregate demand curve? A change in:

Profit expectations on investment projects

A fall in prices of imported resources will cause aggregate:

Supply to increase

A movement along the aggregate demand curve would be caused by a change in:

The price level

An increase in the real value of stock prices, which is independent of a change in the price level, would affect aggregate demand due to:

Wealth-effect

An expected decline in the prices of consumer goods will:

decrease aggregate demand

An increase in personal income tax rates will cause a(n):

decrease in aggregate demand

An increase in taxes on consumers will most likely cause a(n):

decrease in aggregate demand

An expected rise in the rate of inflation for consumer good will:

increase aggregate demand

An increase in expected future income will:

increase aggregate demand

An increase in aggregate demand is most likely to be caused by a decrease in:

the tax rates on household income