Case_macro8c1_Ch13 - Chapter 13 Aggregate Demand, Aggregate...

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Unformatted text preview: Chapter 13 Aggregate Demand, Aggregate Supply, and Inflation Principles of Macroeconomics, Case/Fair, 8e 13.1 The Aggregate Demand Curve Multiple Choice 1 In an econom y, when the price level falls, consumers and firms buy more goods and services. This relationship is represented by the A . aggregate expenditures curve. B . aggregate demand curve. C . short-run aggregate supply curve. D . long-run aggregate supply curve. Answer : B The aggreg ate demand curve shows a ________ relationship between ________ and total quantity of output ________. A . positive; the interest rate; demanded B . negative; the price level; supplied C . positive; the price level; demanded D . negative; the price level; demanded Answer : D The aggregate demand curve shows that, ceteris paribus, A . at higher price levels, total quantity of output demanded is higher. B . at lower price levels, total quantity of output supplied is lower. C . at lower price levels, total quantity of output demanded is higher. D . at higher price levels, total quantity of output supplied is lower. Answer : C The aggregate demand curve A . is an upward sloping curve. B . is a downward sloping curve. C . may slope upward or downward. D . is horizontal. Answer : B Money demand is a function of all of the following EXCEPT A . interest rate. B . price level. C . money supply. D . aggregate output. Answer : C Aggreg ate output demanded will fall if A . the interest rate is reduced. B . the price level increases. C . the money supply is increased. D . net taxes are reduced. Answer : B (P decreases , Md decre, r dec, I incre, AE inc, Y incr ) Refer to the information provided in Figure 13.1 below to answer the questions that follow. Figure 13.1 Refer to Figure 13.1. The money demand curve will shift from to , if A . the price level decreases. B . the interest rate decreases. C . the level of aggregate output increases. D . the inflation rate increases. Answer : A Refer to Figure 13.1. If the money demand curve shifts from to , A . planned investment will decrease and aggregate output will decrease. B . planned investment will decrease and aggregate output will increase. C . planned investment will increase and aggregate output will decrease. D . planned investment will increase and aggregate output will increase. Answer : D ( Md dec, r dec, I inc, AE inc, Y inc) Which of the following sequence of events is TRUE? A . P M d r B . P M d r C . Y M d r D . Y M d r Answer : D...
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This note was uploaded on 04/06/2012 for the course BUSINESS CS204, Eco taught by Professor Mr during the Spring '12 term at American University of Beirut.

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Case_macro8c1_Ch13 - Chapter 13 Aggregate Demand, Aggregate...

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