Question
Which of the following is a reason why the aggregate demand curve is downward sloping? Your answer: A higher price level decreases savings. A higher
Which of the following is a reason why the aggregate demand curve is downward sloping?
Your answer: | |
---|---|
A higher price level decreases savings. | |
A higher price level increases purchasing power. | |
A higher price level increases exports. | |
A higher price level decreases imports. | |
A higher price level decreases real wealth. |
An increase in the marginal propensity to consume causes an increase in which of the following?
Your answer: | |
---|---|
Marginal propensity to save | |
Spending multiplier | |
Savings rate | |
Exports | |
Aggregate supply |
According to the wealth effect, when the price level decreases, the purchasing power of assets:
Your answer: | |
---|---|
decreases and consumer spending decreases | |
increases and consumer spending decreases | |
decreases and consumer spending increases | |
remains cost and consumer spending is unchanged | |
increases and consumer spending increases |
As a result of a decrease in the value of the dollar in relation to other currencies, American imports decrease and exports increase. Consequently, there is a(n):
Your answer: | |
---|---|
increase in AS | |
decrease in the quantity of aggregate output supplied in the short-run | |
increase in aggregate demand | |
decrease in the quantity of aggregate output demanded | |
decrease in the LRAS |
Suppose consumer expectations about the future improve. How will this affect the AD curve?
Your answer: | |
---|---|
AD shifts to the left | |
There will be a movement upward along the fixed aggregate demand curve | |
AD shifts to the right | |
There will be a movement downward along the fixed aggegate demand curve | |
The aggregate demand curve will become steeper and nearly vertical |
A high marginal propensity to consume implies which of the following?
Your answer: | |
---|---|
A small change in consumption when income changes | |
A high savings rate | |
A high marginal tax rate | |
An equilibrium level of income near full employment | |
A low marginal propensity to save |
If inflation is expected to be higher in the future:
Your answer: | |
---|---|
AS shifts to the left in the near-term as producers anticipate higher future revenues | |
AS shifts to the right in the near-term as producers seek to sell at lower prices | |
producers will exit the market | |
producers will lower prices now so the future inflation will not increase their profits |
Panel (a) Panel (b] Price level Price lovol SRAS. SRASA X AD Real GDP Real GDP Panel (c) Panel (d) Price level Price level SRAS, SRAS, SRAS. SRAS AD AD, Real GDP Real GDP
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