1. Which of the following shifts aggregate demand to the right? A) a decrease in the money supply. B. a decrease in net exports at every exchange rate C) a decrease in prices D) a decrease in imports 2. Which of the following shifts aggregate demand to the right?

a ) a decrease in the money supply

b) technological improvement that increases the profitability of capital investments

c) the repeal of an investment tax credit

d) a decrease in the price level

3. How does Canadian aggregate demand change if the dollar appreciates or other countries experience recessions?

a) aggregate demand shifts right.

b) aggregate demand shifts left.

c) if the dollar appreciates, aggregate demand shifts right; if other countries experience recessions, aggregate demand shifts left.

d) if the dollar appreciates, aggregate demand shifts left; if other countries experience recessions, aggregate demand shifts right.

4. Which of the following could cause an increase in the price level and a decrease in real GDP in the short run?

a) an increase in the money supply

b) an increase in government expenditures

c) a fall in stock prices

d) bad weather in agriculture producing provinces

5. If XNis an autonomous $90 and the MPM is 0.2, what is the value of XNat an income of $500?

a. +$10.

b. -$10.

c. +$90.

d. +$590.

6. If in an economy, the MTR = 0.2, the MPS = 0.25, and the MPM = 0.15, what is the value of the multiplier?

a. 1.67

b) 2

c) 2.22

d) 2.5

e) 3.33

Y	C	S	I	G	X	IM	XN	AE
0	200	-200	200	500	400	100
500	600	-100	200	500	400	150
1000	1000	0	200	500	400	200
1500	1400	100	200	500	400	250
2000	1800	200	200	500	400	300
2500	2200	300	200	500	400	350
3000	2600	400	200	500	400	400
3500	3000	500	200	500	400	450
4000	34000	600	200	500	400	500

7. Refer to the data above to answer this question. What is the equation for the consumption function?

1. C = 200Y.
2. C = 200 + Y.
3. C = 200 + 0.6Y.
4. C = 0.8Y.
5. C = 200 + 0.8Y.

8. Refer to the data above to answer this question. What is the equation for the saving function?

1. S = -200Y.
2. C = -200 + Y.
3. C = -200 + 0.2Y.
4. C = -200 + 0.8Y.
5. C = 200 + 0.8Y.

9. Refer to the data above to answer this question. What is the equation for the net export function?

1. XN = 300.
2. XN= 400 - 300Y.
3. XN= 300 - 50Y.
4. XN = 300 + 0.1Y.
5. XN= 300 - 0.1Y.

10. Refer to the data above to answer this question. What is the value of autonomous aggregate expenditures?

1. 0.
2. 200.
3. 1,200.
4. 2,500.
5. 4,000.

11. Refer to the data above to answer this question. What is the equation for the aggregate expenditures function?

1. AE = 1,200.
2. AE = 2,500Y.
3. AE = 1,200 + 0.7Y.
4. AE = 1,200 + 0.8Y
5. AE = 1,400 + 0.8Y

12. Refer to the data above to answer this question. What is the value of expenditures equilibrium?

1. 1,000.
2. 1,200.
3. 2,500.
4. 3,000.
5. 4,000