2020_300pschpt10 - Problem set chapter 10 Student: _ 1. The...

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Student: ___________________________________________________________________________ 1. The aggregate demand curve: A. is upsloping because a higher price level is necessary to make production profitable as production costs rise. B. is downsloping because production costs decline as real output increases. C. shows the amount of expenditures required to induce the production of each possible level of real output. D. shows the amount of real output that will be purchased at each possible price level. 2. The interest-rate effect suggests that: A. a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending. B. an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending. C. an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. D. an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending. 3. The foreign purchases effect suggests that a decrease in the U.S. price level relative to other countries will: A. shift the aggregate demand curve leftward. B. shift the aggregate supply curve leftward. C. decrease U.S. exports and increase U.S. imports. D. increase U.S. exports and decrease U.S. imports. 4. The foreign purchases effect: A. shifts the aggregate demand curve rightward. B. shifts the aggregate demand curve leftward. C. shifts the aggregate supply curve rightward. D. moves the economy along a fixed aggregate demand curve. 5. Other things equal, if the national incomes of the major trading partners of the United States were to rise, the U.S.: A. aggregate demand curve would shift to the right. B. aggregate supply curve would shift to the left. C. aggregate supply curve would shift to the right.
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2020_300pschpt10 - Problem set chapter 10 Student: _ 1. The...

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