Question
Which equation best defines Aggregate Demand (AD)? Group of answer choices A. MV=PY B. AD = C + I + G + (X + M)
- Which equation best defines Aggregate Demand (AD)?
Group of answer choices
A. MV=PY
B. AD = C + I + G + (X + M)
C. AD = C + I + G + (X - M)
D. AD = SAS + LAS
2. Which of the following would shift the U.S. AD curve to the right?
Group of answer choices
A. An increase in government spending.
B. A dollar appreciation.
C. A crash in the stock market.
D. A decrease in consumption spending.
3. A large recession in Europe, a large U.S. trading partner, would most likely cause:
Group of answer choices
A. a decrease in U.S. exports and U.S. AD curve shifts left.
B. a decrease in U.S. exports, so the U.S. AD curve shifts right.
C. an increase in U.S. exports, so the U.S. AD curve shifts left.
D. an increase in U.S. exports, so the U.S. AD curve shifts right.
4. If the U.S. Dollar were to depreciate against the Mexican Peso, the U.S. would experience:
Group of answer choices
A. an increase in U.S. exports and a shift right of the U.S. AD curve.
B. an increase in U.S. exports and a shift left of the U.S. AD curve.
C. a decrease in U.S. exports and a shift right of the U.S. AD curve.
D. a decrease in U.S. exports and a shift left of the U.S. AD curve.
5. In response to Covid, starting in early 2020, the U.S. government ______________ and the Federal Reserve______________.
Group of answer choices
A. passed a series of large spending bills in an attempt to increase AD; drove interest rates to exceptionally low levels.
B. attempted to shift the AD curve to the left; attempted to shift the AD curve to the right.
C. responded as would be recommended by classical economics; pursued activist monetary policy.
D. A and B are correct but not C.
6. By driving interest rates up (i.e., monetary policy) as a response to the inflation problem that emerged in 2022, the Federal Reserve is trying to shift the:
Group of answer choices
A. SAS curve right.
B. AD curve right.
C. LAS curve right.
D. AD curve left.
7. Conceptually, along a given Short Run Aggregate Supply Curve (SAS), the Price level (P) ________ and Wages (W) are ________.
Group of answer choices
A. is constant; constant.
B. is constant; variable.
C. is variable; variable.
D. is variable; constant.
8. Conceptually, along a given SAS curve, as P increases,
Group of answer choices
A. Profits improve causing firm to produce more.
B. Profits improve causing firm to produce less.
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