All of the following lead to an increase in aggregate demand except Answer a. an
ID: 1180532 • Letter: A
Question
All of the following lead to an increase in aggregate demand except Answer a. an increase in domestic wealth b. a decrease in the domestic price level. c. a decrease in interest rates. d. depreciation of the domestic currency. e. an increase in foreign income. 1 points Question 2 According to the "wealth effect", when the ________ falls, the ________ rises. Answer inflation rate; nominal value of household assets unemployment rate; average level of household income price level; the nominal value of household wealth price level; the real value of household wealth 1 points Question 3 If the economy receives an influx of new workers from immigration, Answer we will move up along the long-run aggregate supply curve. the long-run aggregate supply curve will shift to the left. we will move down along the long-run aggregate supply curve. the long-run aggregate supply curve will shift to the right. 1 points Question 4 If consumers become more pessimistic about their future economic well-being, we would expect Answer a. the AD curve to shift to the left. b. a movement to the left along the AD curve. c. the AD curve to shift to the right. d. a movement to the right along the AD curve. e. the AD curve to be unchanged, but the AS curve to shift to the right. 1 points Question 5 Lower personal income taxes Answer increase aggregate demand. decrease aggregate demand. decrease disposable income. increase transfer payments. 1 points Question 6 The AD demand curve is downward sloping because -- SELECT ALL THAT APPLY Answer I. As price level increases, purchasing power of wealth declines. II. An increase in price level results in an increase in interest rate. This causes investment expenditures to decrease. III. As price level rises, the aggregate demand curve shifts left. IV. As domestic price level rises, foreign goods become more attractive and domestic goods become less attractive to foreigners. This results in a decrease in net exports. 1 points Question 7 The long-run aggregate supply curve is Answer a. vertical, because there is no relationship between the price level and real GDP in the long run. b. upward-sloping because of the effect of higher prices on profits. c. horizontal, because there is no relationship between the price level and real GDP in the long run. d. horizontal, reflecting excess capacity in all parts of the economy. e. upward-sloping, reflecting excess capacity in some parts of the economy. 1 points Question 8 An upward sloping SAS curve is drawn under the assumption that Answer a. interest rates are decreasing. b. businesses expect to maintain current profit levels. c. wages are flexible. d. the price of output is fixed. e. the prices of resources/inputs are fixed. 1 points Question 9 The level of long-run aggregate supply is affected by all of the following except Answer changes in the technology. changes in the capital stock. changes in the rental rate of capital. changes in the number of workers. All of the above.Explanation / Answer
1) d
2) inflation rate,the real value of household wealth
3) the long-run aggregate supply curve will shift to the right.
4) a
5) increase aggregate demand.
6) I, IV
7) b
8) a
9) none of the above