This quiz works best with JavaScript enabled. Home > Macroeconomics > Aggregate > Aggregate Demand – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Aggregate Demand Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. During recessions, which types of spending falls? A) Consumption and investment. B) Investment but not consumption. C) Consumption but not investment. D) Consumption and government. Show Answer Correct Answer: A) Consumption and investment. 2. New technology leads to a ..... in demand for funds for investment. A) Decrease. B) Halt. C) Increase. D) Surplus. Show Answer Correct Answer: C) Increase. 3. Break-even point is achieved when: A) National income= consumption. B) Consumption = saving. C) Consumption= investment. D) National income > consumption,. Show Answer Correct Answer: A) National income= consumption. 4. Net exports will increase if: A) There is a decrease in foreign Real GDP. B) The exchange rate for the dollar depreciates. C) Both of the above. D) Neither of the above. Show Answer Correct Answer: B) The exchange rate for the dollar depreciates. 5. Tax multiplier = A) MPC/MPS. B) MPS/MPC. C) 1 Less than spending multiplier. D) 1 more than spending multiplier. Show Answer Correct Answer: A) MPC/MPS. 6. In an average capitalist economy, what percentage of AD does consumption account for? A) 50%. B) 60%. C) 70%. D) 80%. Show Answer Correct Answer: B) 60%. 7. Which of the following would increase aggregate demand? A) Increased saving. B) Increasing import spending. C) Increased taxation revenue. D) Increased investment. Show Answer Correct Answer: D) Increased investment. 8. The SRAS curve shows the relationship between A) Price and Quantity. B) Price Level and Real Output. C) Price and Real Output. D) None of the above. Show Answer Correct Answer: B) Price Level and Real Output. 9. The short run aggregate supply curve will shift to the left if A) Firms expect the price level to increase. B) The statutory retirement age is raised. C) The price level increases. D) Oil prices decrease. Show Answer Correct Answer: A) Firms expect the price level to increase. 10. Which is the least likely determinant of government expenditure in the UK? A) The exchange rate. B) Perceived degree of market of market failure. C) Public sector debt. D) The economic situation. Show Answer Correct Answer: A) The exchange rate. 11. Which of the following government policies will cause the AD curve and the AS curves to shift to the right? A) Raising the sales tax rate. B) Lowering the salaries tax rate. C) Abolishing unemployment benefits. D) Putting more resources into on-the-job training programmes. Show Answer Correct Answer: D) Putting more resources into on-the-job training programmes. 12. Which of the following would cause the aggregate supply curve to shift? A) Change in consumer spending. B) Government spending. C) Change in interest rates. D) Cost of production change. Show Answer Correct Answer: D) Cost of production change. 13. The intersection of the aggregate demand and aggregate supply curve occurs at the economy' s equilibrium level of A) Nominal investment and the interest rate. B) Government taxes and employment. C) Real disposable income and unemployment. D) Real domestic output and the price level. Show Answer Correct Answer: D) Real domestic output and the price level. 14. When the government spends more, the initial effect is that A) Aggregate demand shifts right. B) Aggregate demand shifts left. C) Aggregate supply shifts right. D) Aggregate supply shifts left. Show Answer Correct Answer: A) Aggregate demand shifts right. 15. Disposable Income = A) Gross income-Net Taxes. B) Gross income + Net Taxes. C) Gross income / Net Taxes. D) Gross income + total taxes. Show Answer Correct Answer: A) Gross income-Net Taxes. 16. The multiplier is: A) 1/MPC. B) 1/1+MPC. C) 1/MPS. D) 1/1-MPS. Show Answer Correct Answer: C) 1/MPS. 17. Find S when C=200, MPS = 0.4 & Y = 1000 A) 400. B) 420. C) 210. D) 200. Show Answer Correct Answer: D) 200. 18. What term best describes the total demand for final goods and services at a range of price levels during a stated period of time? A) Aggregate Supply. B) Total Supply. C) Total Demand. D) Aggregate Demand. Show Answer Correct Answer: D) Aggregate Demand. 19. Keynes believed that economies experiencing high unemployment should adopt policies to A) Reduce the money supply. B) Reduce government expenditures. C) Increase aggregate demand. D) Increase aggregate supply. Show Answer Correct Answer: C) Increase aggregate demand. 20. If a country imports more than it exports, it is experiencing a ..... A) Budget Surplus. B) Budget Deficit. C) Trade Surplus. D) Trade Deficit. Show Answer Correct Answer: D) Trade Deficit. ← PreviousNext →Related 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 9Aggregate Demand Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books