Aggregate Demand Quiz 3 (25 MCQs)

Quiz Instructions:

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1. Average propensity to consume is equal to:

2. Positive net exports lead to _____

3. An Economy's AD demand measures

4. Which of the following can fix an inflationary gap?

5. The increase in spending that occurs because the real value of money increases when the price level falls is called

6. Decreases in SRAS tend to cause:

7. Which of the following will shift the short-run aggregate supply curve to the right?

8. The Keynesian AS curve range where it is impossible to increase output any further because the factors of production are fully employed.

9. Multiplier is estimated as:

10. Graphically, cost-push inflation is shown as a:

11. Which of the following indicates AD in an open economy

12. What is an inflationary gap?

13. If MPC is greater than MPS, the value of the multiplier will be

14. A change in any of the determinants of AD will

15. A change in any of the following factors could cause the aggregate demand curve to shift except:

16. If MPC (Marginal Propensity to Consume) is high, how would an increase in income impact on the AD curve?

17. Aggregate demand consists of which components of aggregate expenditure?

18. Illustrate the effect of the following on LRAS diagrams.A loss arable land from deforestation

19. A reduction in Interest rates will not tend to

20. An increase in aggregate demand will generate _____ in real GDP and _____ in the price level in the short-run

21. What is a recessionary gap?

22. The difference between tax revenue and government spending when government spending exceeds tax revenue.

23. Changes in consumption, gross investment, government spending, or net exports will shift the _____

24. The multiplier effect means that

25. An increase in which of the following shifts aggregate demand to the right?