Aggregate Demand Quiz 2 (25 MCQs)

Quiz Instructions:

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1. If the MPC is .7 and gross investment spending increase by $ 3 billion, GDP will

2. An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the

3. Spending on public road networks in an economy is an example of

4. Which of the following will cause an increase in consumption?

5. Consider the consumption function C = Ca + bY. Which part of this function is called the autonomous consumption spending?

6. When Aggregate Supply(AS) is highly elastic, the multiplier is likely to be _____

7. Investment is the purchase of _____

8. Increase in consumption owing to increase in income leads to:

9. The immediate-short-run aggregate supply curve is

10. An increase in the marginal propensity to consume causes an increase in which of the following?

11. Suppose the short run aggregate supply of an economy decreases while the long run aggregate supply remains unchanged. This may be caused by

12. When will the multiplier effect be large?

13. Aggregate demand would shift right if

14. Which of the following does NOT shift the AD curve?

15. Which is NOT a drawback of increased consumption?

16. What is represented on the "X" axis on the AS graph?

17. The bigger MPC _____

18. Which of the following will increase consumption?

19. Which of the following is a disadvantage of the multiplier effect?

20. If MPC = 0, the multiplier will be:

21. Which of the following is NOT the reason for the AD curve to be downward sloping?

22. A positive impact on consumption could be due to

23. The nation of Mordor sees an increase in exports to other nations. This should result in:

24. Changes in foreigners' spending will arise from which of the following factors?

25. Which is NOT a benefit of increased consumption?