Question 1

If there were no real wealth or interest rate effect,the aggregate demand curve would still be downward sloping.

Accepted Answer

A) True 
 B)False

Question 2

What does empirical evidence suggest about consumption?

Accepted Answer

A) It decreases with any tax cut. 
B) It increases with an increase in income. 
C) It decreases with any increase in income. 
D) It increases with any decrease in consumer confidence. 
A) It decreases with any tax cut. 
B) It increases with an increase in income. 
C) It decreases with any increase in income. 
D) It increases with any decrease in consumer confidence.

Question 3

What is aggregate demand the sum of?

Accepted Answer

A) C + I + G 
B) C + I + G + (X - M) 
C) C + I + G + X 
D) C + I + G + (X + M) 
A) C + I + G 
B) C + I + G + (X - M) 
C) C + I + G + X 
D) C + I + G + (X + M)

Question 4

What sector will a massive increase in highway construction affect aggregate demand through?

Accepted Answer

A) investment 
B) consumption 
C) government purchases 
D) net exports 
A) investment 
B) consumption 
C) government purchases 
D) net exports

Question 5

Vannah earned $250 000 in 2011 as a celebrity endorser and spokesperson.She spent 85 percent of her earnings.In 2012,with a new contract she earned $750 000 per year.Her consumption increased by $250 000.Which of the following statements about her propensity to consume is NOT accurate?

Accepted Answer

A) Her 2012 marginal propensity to consume is 0.50. 
B) Her 2011 average propensity to consume is 0.85. 
C) Her average propensity to consume fell between 2011 and 2012. 
D) Her marginal propensity to save falls to 0.15 in 2012. 
A) Her 2012 marginal propensity to consume is 0.50. 
B) Her 2011 average propensity to consume is 0.85. 
C) Her average propensity to consume fell between 2011 and 2012. 
D) Her marginal propensity to save falls to 0.15 in 2012.

Question 6

The real wealth effect is one reason for the negative slope of the aggregate demand curve.

Accepted Answer

A) True 
 B)False

Question 7

If a U.S.citizen buys a science fiction book printed in Canada,how does that transaction affect the measurement of aggregate demand in Canada?

Accepted Answer

A) It increases U.S. aggregate demand by the purchase price of the book. 
B) It enters aggregate demand as investment. 
C) It is an export, and is included in aggregate demand. 
D) It is an import, and is not included in aggregate demand. 
A) It increases U.S. aggregate demand by the purchase price of the book. 
B) It enters aggregate demand as investment. 
C) It is an export, and is included in aggregate demand. 
D) It is an import, and is not included in aggregate demand.

Question 8

What impact will a decrease in the Canadian price level have?

Accepted Answer

A) It will decrease real GDP demanded in Canada. 
B) It will increase Canadian exports. 
C) It will increase Canadian imports. 
D) It will increase money demand in Canada. 
A) It will decrease real GDP demanded in Canada. 
B) It will increase Canadian exports. 
C) It will increase Canadian imports. 
D) It will increase money demand in Canada.

Question 9

Which of the following will cause the aggregate demand to shift to the right?

Accepted Answer

A) a decrease in the price level 
B) an increase in the value of the Canadian dollar relative to the U.S. dollar 
C) an increase in interest rates 
D) a decrease in taxes 
A) a decrease in the price level 
B) an increase in the value of the Canadian dollar relative to the U.S. dollar 
C) an increase in interest rates 
D) a decrease in taxes

Question 10

If private consumption in Canada was 67 percent of GDP,investment was 16 percent,government purchases were 13 percent,exports were 12 percent,and imports were 8 percent,what is the net exports percentage of GDP?

Accepted Answer

A) -20 percent 
B) -4 percent 
C) 4 percent 
D) 20 percent 
A) -20 percent 
B) -4 percent 
C) 4 percent 
D) 20 percent

Question 11

Describe the difference between a microeconomic demand curve and an aggregate demand curve.

Accepted Answer

A microeconomic demand curve shows the r

Question 12

Either an increase in disposable income or a decrease in expected future earnings would shift the supply of national savings curve to the right.

Accepted Answer

A) True 
 B)False

Question 13

Figure 8-2
  
-Refer to Figure 8-2.Which of the following a shift in aggregate demand from AD₀ to AD₁ illustrate?

Accepted Answer

A) a decrease in consumption, combined with an increase in export 
B) an increase in business tax rates, combined with a decrease in consumer confidence 
C) faster growth rates by a major trading partner, combined with an increase in stock market wealth 
D) an increase in government purchases, combined with a decrease in investment 
A) a decrease in consumption, combined with an increase in export 
B) an increase in business tax rates, combined with a decrease in consumer confidence 
C) faster growth rates by a major trading partner, combined with an increase in stock market wealth 
D) an increase in government purchases, combined with a decrease in investment

Question 14

What is the largest component of aggregate demand?

Accepted Answer

A) government purchases 
B) net exports 
C) consumption 
D) investment 
A) government purchases 
B) net exports 
C) consumption 
D) investment

Question 15

What would result from an increase in the investment demand curve?

Accepted Answer

A) an increase in real interest rates 
B) a decrease in real interest rates 
C) a decrease in the dollar amount of savings 
D) a decrease in the dollar amount of investment 
A) an increase in real interest rates 
B) a decrease in real interest rates 
C) a decrease in the dollar amount of savings 
D) a decrease in the dollar amount of investment

Question 16

What would result from an increase in the supply of national savings curve?

Accepted Answer

A) an increase in real interest rates 
B) a decrease in real interest rates 
C) a decrease in the dollar amount of savings 
D) a decrease in the dollar amount of investment 
A) an increase in real interest rates 
B) a decrease in real interest rates 
C) a decrease in the dollar amount of savings 
D) a decrease in the dollar amount of investment

Question 17

Which of the following does NOT shift Canadian aggregate demand to the right?

Accepted Answer

A) a lower price level, increasing citizens' real wealth 
B) an increase in the money supply, reducing interest rates 
C) an increase in the level of government spending 
D) a lower value for the Canadian dollar, increasing exports and decreasing imports 
A) a lower price level, increasing citizens' real wealth 
B) an increase in the money supply, reducing interest rates 
C) an increase in the level of government spending 
D) a lower value for the Canadian dollar, increasing exports and decreasing imports

Question 18

What would be the impact on aggregate demand (AD)if both imports and exports rose?

Accepted Answer

A) AD would rise if exports rose more than imports. 
B) AD would decrease. 
C) AD would increase. 
D) AD would be unaffected. 
A) AD would rise if exports rose more than imports. 
B) AD would decrease. 
C) AD would increase. 
D) AD would be unaffected.

Question 19

Identify factors that would cause consumption spending to increase.What effect would that have on aggregate demand?

Accepted Answer

The factors that cause consumption to in

Question 20

At a given price level,anything that changes the amount of total purchases in the economy will cause the aggregate demand curve to shift.

Accepted Answer

A) True 
 B)False

If there were no real wealth or interest rate effect,the aggregate demand curve would still be downward sloping.

What does empirical evidence suggest about consumption?

What is aggregate demand the sum of?

What sector will a massive increase in highway construction affect aggregate demand through?

Vannah earned $250 000 in 2011 as a celebrity endorser and spokesperson.She spent 85 percent of her earnings.In 2012,with a new contract she earned $750 000 per year.Her consumption increased by $250 000.Which of the following statements about her propensity to consume is NOT accurate?

The real wealth effect is one reason for the negative slope of the aggregate demand curve.

If a U.S.citizen buys a science fiction book printed in Canada,how does that transaction affect the measurement of aggregate demand in Canada?

What impact will a decrease in the Canadian price level have?

Which of the following will cause the aggregate demand to shift to the right?

If private consumption in Canada was 67 percent of GDP,investment was 16 percent,government purchases were 13 percent,exports were 12 percent,and imports were 8 percent,what is the net exports percentage of GDP?

Describe the difference between a microeconomic demand curve and an aggregate demand curve.

Either an increase in disposable income or a decrease in expected future earnings would shift the supply of national savings curve to the right.

Figure 8-2 -Refer to Figure 8-2.Which of the following a shift in aggregate demand from AD₀ to AD₁ illustrate?

What is the largest component of aggregate demand?

What would result from an increase in the investment demand curve?

What would result from an increase in the supply of national savings curve?

Which of the following does NOT shift Canadian aggregate demand to the right?

What would be the impact on aggregate demand (AD)if both imports and exports rose?

Identify factors that would cause consumption spending to increase.What effect would that have on aggregate demand?

At a given price level,anything that changes the amount of total purchases in the economy will cause the aggregate demand curve to shift.

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 8: Aggregate Demand

If there were no real wealth or interest rate effect,the aggregate demand curve would still be downward sloping.

What does empirical evidence suggest about consumption?

What is aggregate demand the sum of?

What sector will a massive increase in highway construction affect aggregate demand through?

Vannah earned $250 000 in 2011 as a celebrity endorser and spokesperson.She spent 85 percent of her earnings.In 2012,with a new contract she earned $750 000 per year.Her consumption increased by $250 000.Which of the following statements about her propensity to consume is NOT accurate?

The real wealth effect is one reason for the negative slope of the aggregate demand curve.

If a U.S.citizen buys a science fiction book printed in Canada,how does that transaction affect the measurement of aggregate demand in Canada?

What impact will a decrease in the Canadian price level have?

Which of the following will cause the aggregate demand to shift to the right?

If private consumption in Canada was 67 percent of GDP,investment was 16 percent,government purchases were 13 percent,exports were 12 percent,and imports were 8 percent,what is the net exports percentage of GDP?

Describe the difference between a microeconomic demand curve and an aggregate demand curve.

Either an increase in disposable income or a decrease in expected future earnings would shift the supply of national savings curve to the right.

Figure 8-2 -Refer to Figure 8-2.Which of the following a shift in aggregate demand from AD₀ to AD₁ illustrate?

What is the largest component of aggregate demand?

What would result from an increase in the investment demand curve?

What would result from an increase in the supply of national savings curve?

Which of the following does NOT shift Canadian aggregate demand to the right?

What would be the impact on aggregate demand (AD)if both imports and exports rose?

Identify factors that would cause consumption spending to increase.What effect would that have on aggregate demand?

At a given price level,anything that changes the amount of total purchases in the economy will cause the aggregate demand curve to shift.

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters