Exam 8: Aggregate Demand

When the price level falls,we would expect to see a decrease in the demand for money,ceteris paribus; and if the money supply is held constant,we would expect to see a lower interest rate and an increase in investment,which would increase aggregate demand.

What impact will a lower real interest rate have?

What happens to aggregate demand if the demand for consumption goods decreases? What if the demand for investment goods increases?

If some non-price-level determinant causes total spending to increase,what will the effect on aggregate demand be?

It is possible for the marginal propensity to consume to be less than one and the average propensity to consume to be greater than one at the same time.

Ben N.Jerry prefers to keep his $10 000 retirement savings buried in the backyard.After an increase in the price level,Ben reduces the amount of goods and services he wants to purchase.Ben's rationalization,that now his retirement savings won't buy as much,is consistent with which explanation of the aggregate demand curve's negative slope?

What effect would an increase in consumption,combined with an increase in exports,have on aggregate demand (AD)?

What would increase the supply of national savings curve?

What effect would a reduction in business expectations,combined with the imposition of new tariffs by major trading partners,have on aggregate demand (AD)?

How is the national saving schedule for the economy drawn as it relates to real interest rates?

During a recession,governments tend to run budget deficits.What effect will this have on the savings supply curve?

As the price level decreases,what is the impact on interest rates and investments?

A higher MPC means that a given change in net taxes would have a greater effect on a persons' consumption spending.

According to the real wealth effect,if you are living in a period of falling price levels on a fixed income (that is NOT indexed),what is the impact of the cost of the goods and services you buy and your real income?

What effect would an increase in government purchases,combined with a decrease in investment,have on aggregate demand (AD)?

Which of the following statements about consumer expenditures is the most accurate?

Which of the following does NOT contribute to aggregate demand?

What do economists use the term "crowding out" to describe?

How is the investment demand curve for the economy drawn as it relates to real interest rates?

During a recession,governments tend to run budget deficits.What is the result of this on the real interest rate and investment spending?