1.Imports of foreign automobiles increase 10%. Aggregate demand will
increase.
decrease.
remain the same.
2.If consumer debt increases as a result of a nationwide spending spree, then
AD shifts left and the output would increase.
AD shifts left and output would decrease.
AD shifts right and output would increase.
there is a movement down the AD curve as output decreased.
AD shifts right and output would decrease.
3.Fair weather helps produce the best crop of peanuts in a decade. Which determinant of aggregate demand causes the change?
Price
Productivity
Consumer spending
Net exports
Government spending
Investment spending
Government intervention (taxes, subsidies, or regulations)
None of the above
Resource cost
4.Manufacturers begin building a new plant in Arizona. Which determinant of aggregate demand causes the change?
None of the above
Government spending
Price
Government intervention (taxes, subsidies, or regulations)
Investment spending
Resource cost
Consumer spending
Productivity
Net exports
5.The interest rate effect states that
A.aggregate demand can decrease any time there is a decrease in consumption, investment, government spending, or net exports.
B.aggregate demand can increase any time there is an increase in consumption, investment, government spending, or net exports.
C.as price levels fall, interest rates decrease and real GDP increases.
D.as prices rise in an economy, consumers tend to buy cheaper foreign products and fewer domestic products.
E.if price levels drop, the value of money is higher, and consumers will spend more.
6.Manufacturers begin building a new plant in Arizona. Aggregate demand will
remain the same.
decrease.
increase.
7.The Government Accounting Office (GAO) announces deep cuts to social security, Medicare, and welfare programs. Which determinant of aggregate demand causes the change?
Government intervention (taxes, subsidies, or regulations)
Net exports
Investment spending
None of the above
Productivity
Government spending
Resource cost
Consumer spending
Price

