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
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
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 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 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
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
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
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 rise in the rate of inflation for consumer good will:
increase aggregate demand
