- Technological improvements cause the aggregate supply curve to:
A. Shift left
B. Remain the same
C. Shift right
D. Become smaller
E. None of the above
- If consumer confidence is running high, what effect will this have on aggregate demand?
A. The aggregate demand curve will shift to the right.
B. There will be movement along the aggregate demand curve.
C. Consumer confidence has nothing to do with demand.
D. The aggregate demand curve will shift to the left.
E. A decrease in the amount of inflation results.
- What happens when the economy is in range 1?
A. Unemployment is low; spending is high.
B. Spending is low; unemployment is high.
C. There is not enough aggregate supply.
D. All resources are being employed.
E. The economy is at full capacity.
- What best describes full employment?
A. Everyone in the economy has a job.
B. The aggregate demand curve moves into range 3.
C. There is only 4- to 5-percent unemployment.
D. The aggregate supply curve decreases.
E. No effect appears on the aggregate supply and aggregate demand curves.
- What term describes when aggregate supply and aggregate demand come together?
A. Full employment
B. Inflation
C. Equilibrium GDP
D. Equilibrium government spending
E. None of the above
- Which one of the following is a reason that the aggregate demand curve is downward sloping?
A. The substitution effect
B. The income effect
C. The price level
D. The consumer-expectations effect
E. None of the above
- What happens to aggregate expenditures when investment rises?
A. Real income falls.
B. Real income does not change.
C. Aggregate demand decreases.
D. Real income rises.
E. Aggregate supply increases.
Aggregate Expenditures, Aggregate Supply and Aggregate Demand Models
