#1
What is the primary component of aggregate demand in macroeconomics?
Consumption
Investment
Government spending
Net exports
#2
Which of the following is considered an autonomous component of aggregate demand?
Consumption
Investment
Government spending
Net exports
#3
What does the multiplier effect refer to in the context of aggregate demand?
The amplification of initial changes in spending through the economy
The reduction of aggregate demand due to inflation
The decrease in government spending to control inflation
The increase in interest rates to stimulate investment
#4
In the AD-AS model, what is the impact of an increase in aggregate demand on the price level and real output in the short run?
Price level increases, real output decreases
Price level decreases, real output increases
Price level and real output both increase
Price level and real output both decrease
#5
What is the formula for calculating the expenditure multiplier in macroeconomics?
Multiplier = 1 / (1 - MPC)
Multiplier = 1 / MPS
Multiplier = 1 / (1 + MPC)
Multiplier = 1 / (1 - MPS)
#6
Which of the following is a component of net exports in the aggregate demand equation?
Exports
Imports
Both exports and imports
Government spending
#7
What is the relationship between the real interest rate and investment in the context of aggregate demand?
As the real interest rate decreases, investment increases
As the real interest rate decreases, investment decreases
There is no relationship between the real interest rate and investment
Investment is independent of the real interest rate
#8
How does an increase in the exchange rate affect net exports and aggregate demand?
Increase in net exports, increase in aggregate demand
Increase in net exports, decrease in aggregate demand
Decrease in net exports, increase in aggregate demand
Decrease in net exports, decrease in aggregate demand
#9
Which government policy tool is most directly related to influencing aggregate demand?
Monetary policy
Fiscal policy
Supply-side policy
Exchange rate policy
#10
What does the Phillips Curve illustrate in the context of macroeconomics?
The relationship between inflation and unemployment
The relationship between interest rates and investment
The impact of government spending on aggregate demand
The relationship between consumption and income
#11
According to classical economics, what is the long-run impact of changes in aggregate demand on the economy?
No impact on output or employment
Increases output and employment
Decreases output and employment
Leads to hyperinflation
#12
What is the role of the central bank in implementing monetary policy to influence aggregate demand?
Control government spending
Set interest rates and manage money supply
Determine tax policies
Regulate international trade
#13
What is the role of the government budget deficit in influencing aggregate demand?
A government budget deficit increases aggregate demand
A government budget deficit decreases aggregate demand
Government budget has no impact on aggregate demand
A government budget surplus increases aggregate demand
#14
What is the significance of the natural rate of unemployment in macroeconomic analysis?
It represents the maximum achievable level of employment
It indicates the level of unemployment when the economy is at potential output
It determines the level of government spending required for full employment
It measures the impact of inflation on unemployment