All of the following will cause expected rates of return to increase, EXCEPT

Increased political instability

When interest rates rise, all else equal:

The aggregate demand curve shifts left

Increased business confidence causes an increase in

investment spending; shifting the AD curve to the right

All of the following explain the downward slope of the aggregate demand curve, EXCEPT

The law of diminishing marginal utility

An economic boom in Japan causes Japanese consumers to buy more goods and services.

Aggregate demand in the US increases

A government decrease in taxes causes

an indirect increase in aggregate demand

In increase in the US price level will cause

A decrease in the quantity of aggregate output demanded

The interest-rate effect that is produced by an increase in the price level causes

a movement up and to the left along a given AD curve

The housing bubble bursts, causing many Americans to lose much of the equity in their homes.

Consumer spending decreases and AD curve shifts left

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Module 17 - Aggregate Demand

13 termsStudBud Administration204 plays

Review of shift factors of AD curve.

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Questions 13

Answers

1
All of the following will cause expected rates of return to increase, EXCEPT
Increased political instability
Expectations of future profitability
Increasing human capital
An increase in business taxes
2
Consumers respond to a boom in the stock market by buying more; causing the AD curve to shift
Down
Up
To the left
To the right
3
When interest rates rise, all else equal:
The aggregate demand curve shifts left
The aggregate demand curve shifts right
4
The US deficit rises to $1 trillion and US government borrowing approaches $20 trillion
Aggregate demand shifts left
Aggregate demand decreases
Aggregate demand shifts right
Aggregate demand increases
5
Increased business confidence causes an increase in
government spending; shifting the AD curve to the left
investment spending; shifting the AD curve to the left
consumption; shifting the AD curve to the right
investment spending; shifting the AD curve to the right
6
All of the following explain the downward slope of the aggregate demand curve, EXCEPT
The foreign purchases effect
The law of diminishing marginal utility
The interest rate effect
The real balances effect
7
An economic boom in Japan causes Japanese consumers to buy more goods and services.
Aggregate demand in the US increases
Nothing happens to aggregate demand in the US
Aggregate demand in the US decreases
The US trade deficit worsens
8
A government decrease in taxes causes
a direct decrease in aggregate demand
an indirect increase in aggregate demand
a direct increase in aggregate demand
an indirect decrease in aggregate demand
9
In increase in the US price level will cause
A decrease in the quantity of aggregate output demanded
An increase in US exports
The aggregate demand curve to shift to the left
Aggregate output to increase
10
The interest-rate effect that is produced by an increase in the price level causes
a shift to the left of the AD curve
a movement down and to the right along a given AD curve
a movement up and to the right along a given AD curve
a movement up and to the left along a given AD curve
11
An increase in which of the following will cause household spending to increase.
Income taxes
Household debt
Negative expectations
Household wealth
12
When government spending on infrastructure such as roads, ports, and bridges increases...
aggregate demand rises
aggregate demand falls
13
The housing bubble bursts, causing many Americans to lose much of the equity in their homes.
Consumer spending decreases and AD shifts right
Consumer spending decreases and AD curve shifts left
Consumer spending increases and AD shifts left
Consumer spending increases and AD shifts right

Module 17 - Aggregate Demand Flashcards | StudBud