Online Test Ch. 11 Quiz
10 Questions
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Questions and Answers
- 1.The aggregate demand-aggregate supply model is a variable-price-level model that permits analysis of simultaneous changes in real GDP and the price level.
- A.
True
- B.
False
- 2.The aggregate demand curve slopes downward.
- A.
True
- B.
False
- 3.A fall in the price level increases the real value of financial assests with fixed money values and, as a result, increases spending by the holders of these assets.
- A.
True
- B.
False
- 4.A fall in the price level reduces the demand for money in the economy and drives interest rates upward.
- A.
True
- B.
False
- 5.A rise in the price level of an economy (relative to the foreign price levels) tends to increase that economy's exports and to reduce its imports of goods and services.
- A.
True
- B.
False
- 6.The higher the price level, the smaller the wealth of consumers and the lower the consumption schedule.
- A.
True
- B.
False
- 7.A change in AD is caused by a change in the price level, other things equal.
- A.
True
- B.
False
- 8.A fall in excess capacity, or unused existing capital goods, will retard the demand for new capital goods, and therefore reduce AD.
- A.
True
- B.
False
- 9.The real balances effect is one of the determinants of AD.
- A.
True
- B.
False
- 10.A high level of household indebtedness will tend to increase consumption spending and AD.
- A.
True
- B.
False
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