Which of the following events will NOT cause the aggregate demand curve to shift?

a. Businesses are optimistic about the economy, investing heavily in new equipment.

b. Consumers' wealth drops because of a drop in the stock market.

c. A rise in the aggregate price level causes a drop in exports.

d. Governments increase spending on national security in the wake of terrorist attacks.

Aggregate supply shifts to the left when:

a. input prices rise.

b. subsidies are higher.

c. inflation expectations are lower.

d. there is a decrease in burdensome regulations.

What approach to federal finance would you agree with if you were most concerned with the federal government's pursuit of fostering economic growth, stable prices, and full employment?

a. annually balanced budget

b. cyclically balanced budget

c. functional finance

d. trade-balanced budget

Most developed countries with high deficits tend to:

a. have high debt-to-GDP ratios.

b. have low debt-to-GDP ratios.

c. borrow a lot from foreign countries.

d. lend a lot to foreign countries.

__________ government spending, _____ transfer payments, and ____ taxes are all examples of expansionary fiscal policy.

a. Increasing; increasing; lowering

b. Increasing; reducing; raising

c. Reducing; increasing; lowering

d. Reducing; increasing; raising