731 $
© 2014 Pearson Canada Inc.$
Other things equal, a decrease in autonomous consumption shifts the ____ curve to the
____.
A) IS; right
B) IS; left
C) MP; left
D) MP; right
Answer: B
Diff: 1 Type: MC Page Ref: 564
Skill: Applied
Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
the interest rate
A decline in autonomous consumer expenditure causes the aggregate demand function to
shift ____ and the equilibrium level of aggregate output to ____, everything else held
constant.
A) up; rise
B) up; fall
C) down; rise
D) down; fall
Answer: D
Diff: 1 Type: MC Page Ref: 564
Skill: Applied
Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
the interest rate
The aggregate demand curve is downward sloping because a higher inflation rate leads the
central bank to raise ____ interest rates, thereby ____ the level of equilibrium
aggregate output., everything else held constant.
A) real; lowering
B) real; raising
C) nominal; lowering
D) nominal; raising
Answer: A
Diff: 2 Type: MC Page Ref: 563
Skill: Recall
Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
the interest rate