#1
Which of the following is NOT a component of aggregate demand?
Consumption
Investment
Government spending
Imports
#2
In macroeconomics, what does 'C' represent in the equation for aggregate demand (AD = C + I + G + (X - M))?
Currency
Consumption
Capital
Competition
#3
What is the primary function of investment in the context of aggregate demand?
To increase government spending
To increase consumption
To increase production capacity
To decrease inflation
#4
Which of the following is a factor that could lead to a decrease in aggregate demand?
An increase in consumer confidence
A decrease in taxes
An increase in interest rates
An increase in government spending
#5
Which of the following is an example of an external shock that could affect aggregate demand?
A change in consumer preferences
An increase in government spending
A decrease in interest rates
A natural disaster
#6
In the context of aggregate demand, what does 'G' stand for in the equation AD = C + I + G + (X - M)?
Gross Domestic Product
Government spending
General inflation rate
Gross investment
#7
Which of the following is a fiscal policy tool used to stimulate aggregate demand during economic downturns?
Increasing government spending
Decreasing taxes
Raising interest rates
Reducing money supply
#8
What is the main reason behind the negative slope of the aggregate demand curve?
The law of supply
The law of demand
The wealth effect
The substitution effect
#9
Which of the following factors is considered a supply-side determinant of aggregate demand?
Consumer preferences
Government spending
Technological advancements
Interest rates
#10
What is the relationship between inflation and aggregate demand?
As inflation increases, aggregate demand increases
As inflation increases, aggregate demand decreases
Inflation has no effect on aggregate demand
The relationship between inflation and aggregate demand is unpredictable
#11
How does an increase in government spending affect aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors
#12
Which of the following is NOT a determinant of consumption, affecting aggregate demand?
Disposable income
Interest rates
Consumer confidence
Producer prices
#13
What happens to aggregate demand when there is a decrease in the money supply?
Increases
Decreases
Remains unchanged
Becomes volatile
#14
How does technological advancement affect aggregate demand?
Decreases it
Increases it
No effect
Depends on other factors
#15
How does an increase in the exchange rate affect aggregate demand in an open economy?
Increases it
Decreases it
No effect
Depends on other factors
#16
What is the wealth effect in the context of changes in aggregate demand?
An increase in wealth leads to a decrease in consumption
A decrease in wealth leads to an increase in consumption
An increase in wealth leads to an increase in consumption
A decrease in wealth leads to a decrease in investment
#17
How does a decrease in consumer confidence affect aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors
#18
Which of the following is an example of an automatic stabilizer that affects aggregate demand?
Unemployment benefits
Expansionary monetary policy
Government subsidies
Corporate tax cuts
#19
How does a decrease in the exchange rate affect net exports and aggregate demand in an open economy?
Decreases both net exports and aggregate demand
Increases both net exports and aggregate demand
Decreases net exports but increases aggregate demand
Increases net exports but decreases aggregate demand
#20
What effect does an increase in income taxes have on aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors
#21
What is the effect of an increase in net exports on aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors
#22
What is the multiplier effect in the context of changes in aggregate demand?
The initial change in spending leads to a larger final change in GDP
The initial change in spending has no effect on GDP
The initial change in spending leads to a smaller final change in GDP
The initial change in spending leads to a decrease in GDP
#23
How does an increase in interest rates affect investment and aggregate demand?
Increases both investment and aggregate demand
Decreases both investment and aggregate demand
Increases investment but decreases aggregate demand
Decreases investment but increases aggregate demand
#24
How does an increase in household debt affect aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors
#25
How does an increase in wages affect aggregate demand?
Increases it
Decreases it
No effect
Depends on other factors