Chapter 12 PQ-A

Chapter 12 PQ-A - Exam Name_ MULTIPLE CHOICE. Choose the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 1) Which of the following best describes the "wealth effect"? A) When the price level falls, the real value of household wealth rises. B) When the price level falls, the nominal value of household wealth rises. C) When the price level falls, the real value of household wealth falls. D) When the price level falls, the nominal value of household wealth falls. 1) 2) An increase in the price level results in a(n) ________ in the quantity of real GDP demanded because ________. A) decrease; a higher price level increases consumption, investment, and net exports. B) increase; a higher price level increases consumption, investment, and net exports. C) increase; a higher price level reduces consumption, investment, and net exports. D) decrease; a higher price level reduces consumption, investment, and net exports. 2) 3) Spending on the war in Iraq is essentially categorized as government purchases. How do increases in spending on the war in Iraq affect the aggregate demand curve? A) They will shift the aggregate demand curve to the left. B) They will move the economy down along a stationary aggregate demand curve. C) They will move the economy up along a stationary aggregate demand curve. D) They will shift the aggregate demand curve to the right. 3) 4) Which of the following will shift aggregate demand to the left, ceteris paribus? A) an increase in expected profits for firms B) an increase in disposable income C) an increase in net exports D) an increase in interest rates 4) 5) If the economy receives an influx of new workers from immigration,
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Chapter 12 PQ-A - Exam Name_ MULTIPLE CHOICE. Choose the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online