If exports were to rise and imports to fall, leading to an increase in quantity demanded of aggregate output, we would expect as a result,
A) An increase in the price level
B) A fall in the price level.
C) the open economy effect to lessen.
D) No change in the price level.
62) Which of the following would cause aggregate demand to decrease?
A) The government increases taxes on both business and personal income.
B) There is a reduction in the nation's labour supply.
C) The Bank of Canada increases the amount of money in circulation.
D) Businesses and households believe that the economy is headed for good times, so they begin to feel increased security about their jobs.
63) The aggregate demand curve differs from an individual's demand curve in that
A) the aggregate demand curve may not slope down while an individual demand curve must always slope down.
B) the aggregate demand curve looks at the entire circular flow of income and product, while an individual demand curve looks at one good, holding everything else constant.
C) prices change along an individual demand curve but prices are held constant along an aggregate demand curve.
D) the aggregate demand curve slopes up while an individual demand curve slopes down.
64) If you have $2 000 and the GDP deflator decreases from 120 to 110, then
A) the value of the $1 000 decreases.
B) the $1 000 will buy 8.3 percent less of the goods and services produced by society.
C) the $1 000 will buy 8.3 percent more of the goods and services produced by society.
D) you will be able to less goods, but the real value of those goods will decrease at the same time.
65) An aggregate demand curve
A) shifts to the right when the price level increases and to the left when the price level falls.
B) shifts to the right when any non-price-level change that increases aggregate spending occurs.
C) shifts to the right when population decreases and shifts to the left when population increases.
D) does not shift, unlike individual or market demand curves.
66) The aggregate demand curve
A) is like individual demand curves in that prices of other goods are held constant.
B) is like individual demand curves in that income is constant.
C) differs from individual demand curves in that the aggregate demand curve is not downward sloping.
D) differs from individual demand curves in that the aggregate demand curve looks at the entire circular flow of income and product while the individual demand curve looks at only one good.
67) The aggregate demand curve would shift to the right as a result of
A) a drop in the price level.
B) tax increases.
C) a drop in the foreign exchange value of the dollar.
D) a decrease in the amount of money in circulation.
68) An indirect effect because price level increases cause borrowing to increase, which raises interest rates and reduces quantity demanded for goods and services is known as:
A) the interest rate effect..
B) the real balance effect.
C) the open economy effect.
D) the Fisher effect.
69) The aggregate demand curve would shift to the left if
A) the economic conditions in Europe improved.
B) there was a tax decrease.
C) the Bank of Canada caused the real interest rate to increase.
D) the foreign exchange rate of the dollar decreased.
70) An individual holds $20 000 in an interest-earning checking account earning 10% interest, and the overall price level rises by 12%. Other things constant, we would expect
A) the individual's real wealth to decrease and consumption to diminish.
B) the individual's stock of real wealth to decrease but real national income to increase.
C) no change in the individual's real wealth but a decline in real national product.
D) real wealth has gone down by 12%.
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