Economics. Chapter 9
The aggregate demand curve shifts to the right, causing output and income to increase. Then the additional consumption generated by the additional income causes a further increase in the aggregate demand curve.
The aggregate demand curve shifts to the left, causing output and income to decrease. Then the resulting reduction in consumption and income causes a further decrease in the aggregate demand curve.
Output, income and consumption remain unchanged, allowing government spending to have an indefinite ripple effect throughout the economy.
The total shift in aggregate demand is identical to the initial shift in aggregate demand.
Increase output but leave the level of prices unchanged.
Increase prices but leave the level of output unchanged.
Increase both prices and output.
Leave both output and prices unchanged.
An increase in net exports.
A decrease in net exports.
No change in net exports.
An ambiguous effect on net exports, causing net exports to increase sometimes and other times to decrease.
The principle of opportunity cost.
The real-nominal principle.
The principle of diminishing returns.
The principle of voluntary exchange.
The marginal principle.
Insufficient demand for goods and services.
Insufficient supply of goods and services.
Falling wages that reduced the purchasing power of households.
The lack of vision of Classical economists.
A lower price level will lead to lower interest rates and higher consumption and investment spending.
A lower price level will lead to lower interest rates and lower consumption and investment spending.
A higher price level will lead to higher interest rates, lower consumption, and higher investment spending.
A higher price level will lead to lower interest rates, higher consumption and higher investment spending.
Market demand.
Aggregate demand.
Labor demand.
Each and every demand curve, or the sum of market demands in the economy.
The economy will move up and to the left along a stationary aggregate demand curve.
The aggregate demand curve will shift to the right.
The aggregate demand curve will shift to the left.
None of the above.
Increased AD.
Decreased AD.
Neither the increased AD curve, nor decreased AD curve. The money supply does not affect the AD curve.
Either curve depending on other factors.
We need only information about aggregate supply.
We need only information about aggregate demand.
We need to combine both aggregate demand and aggregate supply.
We need information other than that provided by aggregate demand or supply curves.
When the price level falls, the real value of household wealth rises, and so will consumption.
When income rises, consumption rises.
When the price level falls, the nominal value of assets rises, while the real value of assets remains the same.
All of the above.
$18.
$50.
$8.
None of the above.
Auction prices.
Wages.
Custom prices.
All of the above.
Ca.
B.
BY.
Ca + bY.
Increases in the purchasing power of wages.
Decreases in the purchasing power of wages.
Increases in wages and prices.
Decreases in wages and prices.
A period of time in which at least one input in production remains fixed.
A period of time lasting less than one year.
A period of time anywhere from one to five years.
A period of time in which prices don’t change or don’t change very much.
A recession.
A depression.
A recovery.
A boom.
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