1)Aggregate demand is given by P = 100 - Y, aggregate supply is given by P = 10 + 2Y and potential GDP is 25. The long-run price level is...

a.75.

b.10.

c.25.

d.100.

2)If autonomous expenditure increases, the aggregate expenditure curve...

a.Pivots around the short-run equilibrium.

b.Pivots around the intercept.

c.Shifts up in a parallel way.

d.Shifts up and gets steeper.

3)An decrease in the marginal propensity to consume causes the aggregate expenditure curve to...

a.Get steeper.

b.Get flatter.

c.Shift up.

d.Shift down.

4)Net taxes...

a.Decrease as government spending increases.

b.Increase as government spending increases.

c.Decrease as aggregate demand increases.

d.Increase as income increases.