This quiz works best with JavaScript enabled. Home > Macroeconomics > Aggregate > Aggregate Demand – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Aggregate Demand Quiz 14 (18 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In an average capitalist economy, how much of AD does (X-M) account for? A) 5-6%. B) 7-8%. C) 9-10%. D) 1-2%. Show Answer Correct Answer: D) 1-2%. 2. Looser monetary policies lead to A) An inwards shift of the AD. B) An outwards shift of the AD. C) An outwards shift of the AS. D) An inwards shift of the AS. Show Answer Correct Answer: B) An outwards shift of the AD. 3. Keynes theory of GDP determination is based on the assumption of A) A closed economy. B) Short period analysis. C) AS is perfectly INelastic. D) BOTH A AND B. Show Answer Correct Answer: D) BOTH A AND B. 4. Which components of GDP are also components of aggregate demand? A) Consumption and investment. B) Government spending and net exports. C) All of the above. D) None of the above. Show Answer Correct Answer: C) All of the above. 5. Which of the following would likely cause the short-run aggregate supply curve to shift to the left? A) A decrease in consumer spending. B) A decrease in the price of imported oil. C) An increase in the price of imported oil. D) An increase in consumer spending. Show Answer Correct Answer: C) An increase in the price of imported oil. 6. If countries that imported from the US went into a recession, U.S. net exports would A) Rise, making aggregate demand shift right. B) Rise, making aggregate demand shift left. C) Fall, making aggregate demand shift right. D) Fall, making aggregate demand shift left. Show Answer Correct Answer: D) Fall, making aggregate demand shift left. 7. GDP expressed in constant, or unchanging, (adjusted for inflation) prices is called A) Real GDP. B) Price level. C) Nominal GDP. D) GNP. Show Answer Correct Answer: A) Real GDP. 8. What is represented on the "X" axis on the AD/AS Model? A) Price level. B) Price. C) Real GDP. D) Nominial GDP. Show Answer Correct Answer: C) Real GDP. 9. Spending Multiplier = A) 1/ MPS. B) 1/ MPC. C) 1 X MPC. D) 1 X MPS. Show Answer Correct Answer: A) 1/ MPS. 10. What is the equation for aggregate demand? A) G+U = (X-M). B) C+I+G+ (X-M). C) (X-M) = G+I+C. D) None of above. Show Answer Correct Answer: B) C+I+G+ (X-M). 11. 'The total amount of real output that consumers, firms, gov. and foreigners want to buy ..... '.. A) Aggregate demand. B) Aggregate supply. C) Total income. D) Potential GDP. Show Answer Correct Answer: A) Aggregate demand. 12. Unemployment is high and GDP is declining. To improve conditions, the government increases spending by $ 5B. If the MPC is .75, by how much will GDP rise? A) $ 5B. B) $ 10B. C) $ 15B. D) $ 20B. Show Answer Correct Answer: D) $ 20B. 13. Aggregate supply and ..... are always equal. A) National income. B) Aggregate demand. C) Marginal propensity to save. D) Average propensity to consume. Show Answer Correct Answer: A) National income. 14. All of the following would increase consumption EXCEPT A) Increase in personal income taxes. B) Decrease in interest rates. C) Decrease in existing consumer debt. D) Increase in household incomes. Show Answer Correct Answer: A) Increase in personal income taxes. 15. How do you calculate the multiplier? A) 1/ Propensity to save + tax + import. B) 1 / 1-Marginal propensity to save. C) 1/ Marginal propensity to consume. D) 1 / Aggregate Demand-imports. Show Answer Correct Answer: A) 1/ Propensity to save + tax + import. 16. Ceteris paribus, what will happen to net exports when the real exchange rate decreases? A) Net exports will increase. B) Net exports will fall. C) Net exports are unaffected in the long run. D) Net exports will go into deficit. Show Answer Correct Answer: A) Net exports will increase. 17. Fear of a looming trade war will shift which of the following? A) Aggregate demand to the right. B) Aggregate demand to the left. C) Aggregate supply to the right. D) Aggregate supply to the left. Show Answer Correct Answer: B) Aggregate demand to the left. 18. Which of the following are demand-shocks? A) All of the three. B) Significant change to the exchange rate. C) Significant boom or slump in housing or shares. D) Consumer boom in one of our major trading partners. Show Answer Correct Answer: A) All of the three. ← PreviousRelated QuizzesMacroeconomics QuizzesAggregate Demand Quiz 1Aggregate Demand Quiz 2Aggregate Demand Quiz 3Aggregate Demand Quiz 4Aggregate Demand Quiz 5Aggregate Demand Quiz 6Aggregate Demand Quiz 7Aggregate Demand Quiz 8Aggregate Demand Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books