This quiz works best with JavaScript enabled. Home > Macroeconomics > Aggregate > Aggregate Demand – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Aggregate Demand Quiz 9 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium A) Output would necessarily rise. B) Output would necessarily fall. C) Price level would necessarily fall. D) Price level would necessarily rise. Show Answer Correct Answer: A) Output would necessarily rise. 2. If the dollar depreciates (decreases in value) because other countries are in a recession A) AD shifts right in the US. B) AD shifts left in the US. C) AD is unchanged in the US. D) AS shifts left in the US. Show Answer Correct Answer: B) AD shifts left in the US. 3. Which of the following shifts aggregate supply to the right? A) A decrease in the money supply. B) Technology that increases the productivity. C) An investment increase. D) A decrease in the price level. Show Answer Correct Answer: B) Technology that increases the productivity. 4. Name the Keynesian AS curve range where the spare capacity is "used up" and the economy's available factors of production become increasingly scarce. A) The Keynesian Range. B) The Intermediate Range. C) The Classical Range. D) This definition does not apply to any of the ranges. Show Answer Correct Answer: B) The Intermediate Range. 5. Which of the following is NOT the determinant of AD that causes changes in investment spending? A) Changes in political priorities. B) Changes in business confidence. C) Legal/institutional changes. D) Changes in business taxes. Show Answer Correct Answer: A) Changes in political priorities. 6. Which one of the following is most likely to result in a rightward shift of the short-run aggregatesupply curve? A) A decrease in wage rates. B) A decrease in government spending. C) An increase in taxation. D) An increase in investment expenditure. Show Answer Correct Answer: A) A decrease in wage rates. 7. If countries that imported from Canada went into a recession, Canadian 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. 8. Other things equal, an improvement in productivity will: A) Shift the aggregate demand curve to the left. B) Shift the aggregate supply curve to the left. C) Shift the aggregate supply curve to the right. D) Increase the price level. Show Answer Correct Answer: C) Shift the aggregate supply curve to the right. 9. Everything else held constant, when output is ..... the natural rate level, wages will begin to ....., increasing short-run aggregate supply A) Above; fall. B) Below; fall. C) Above; rise. D) Below; rise. Show Answer Correct Answer: B) Below; fall. 10. Keynes discusses the equilibrium level of output using the concept of A) Autonomous Investment. B) Induced Investment. C) Both a & b. D) None of these. Show Answer Correct Answer: A) Autonomous Investment. 11. What would cause aggregate demand to increase? A) An increase in taxes. B) A decrease in taxes. C) A decrease in government spending. D) Keep government spending constant. Show Answer Correct Answer: B) A decrease in taxes. 12. If MPC = 0.75, the original equilibrium level of income = $ 300 bn and then investment falls by $ 20bn then the new equilibrium level of income = A) $ 380bn. B) $ 280bn. C) $ 220bn. D) $ 205bn. Show Answer Correct Answer: C) $ 220bn. 13. When increased levels of total spending drive prices up, we call it A) Unanticipated inflation. B) Hyperinlfation. C) Cost-push inflation. D) Demand-pull inflation. Show Answer Correct Answer: D) Demand-pull inflation. 14. Which of the following would not shift Aggregate Demand? A) Consumption Spending. B) A change in exports. C) Cost push inflation. D) Business Spending. Show Answer Correct Answer: C) Cost push inflation. 15. Consumption would decrease and aggregate demand would shift A) Right if taxes increase. B) Right if taxes decreases. C) Left in taxes increased. D) Left if taxes decreased. Show Answer Correct Answer: C) Left in taxes increased. 16. When aggregate demand exceeds aggregate supply, ..... results because the shortage created causes prices to increase. A) Unemployment. B) Overemployment. C) Inflation. D) None of above. Show Answer Correct Answer: C) Inflation. 17. If the Bank of England set base rates of 5.5% and the CPI inflation rate is 3.4%, ..... A) Then the real interest rates is said to be 2.1%. B) Then the real interest rates is said to be 8.9%. C) Then the real interest rates is said to be-2.1%. D) None of above. Show Answer Correct Answer: A) Then the real interest rates is said to be 2.1%. 18. If the U.S. and China are trading partners and China's currency depreciates, what effect would that have on the U.S. output and price level? A) Increase, Increase. B) Decrease, Increase. C) Decrease, Decrease. D) Increase, Decrease. Show Answer Correct Answer: C) Decrease, Decrease. 19. Aggregate demand would shift right if either A) Price Level decreased, or government expenditures increased. B) Price Level decreases, or government instituted a tax credit. C) Government expenditures or the money supply increased. D) None of above. Show Answer Correct Answer: C) Government expenditures or the money supply increased. 20. If exports from the United States increased, what would most likely happen to real gross domestic product and price level? Real GDP / Price Level A) Decrease/decrease. B) Increase/increase. C) Decrease/increase. D) Increase/no chanve. Show Answer Correct Answer: B) Increase/increase. ← 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 8Aggregate Demand Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books