#1
Which of the following is NOT a component of aggregate demand?
Consumption
Investment
Government spending
Imports
#2
What happens to aggregate demand if there is an increase in consumer confidence?
Aggregate demand decreases
Aggregate demand increases
Aggregate demand remains unchanged
Aggregate demand becomes negative
#3
Which of the following is a determinant of aggregate demand?
Price level
Cost of production
Long-run economic growth
Number of firms in the market
#4
What effect does an increase in government spending typically have on aggregate demand?
It decreases aggregate demand
It increases aggregate demand
It has no effect on aggregate demand
It decreases consumer confidence
#5
Which of the following is a factor that can shift the aggregate demand curve?
Changes in consumer tastes and preferences
Changes in the labor force participation rate
Changes in the minimum wage
Changes in the price of raw materials
#6
Which of the following is a tool of monetary policy used by central banks to influence aggregate demand?
Fiscal policy
Interest rates
Government spending
Taxation
#7
What effect does an increase in the money supply typically have on aggregate demand?
It decreases aggregate demand
It increases aggregate demand
It has no effect on aggregate demand
It decreases consumer spending
#8
What is the relationship between interest rates and investment in the context of aggregate demand?
Higher interest rates lead to higher investment
Higher interest rates lead to lower investment
Interest rates have no effect on investment
Lower interest rates lead to lower investment
#9
What is the relationship between net exports and aggregate demand?
Higher net exports lead to higher aggregate demand
Higher net exports lead to lower aggregate demand
Net exports have no effect on aggregate demand
Higher net exports lead to a decrease in investment
#10
What is the formula for calculating aggregate demand (AD)?
AD = C + I + G + (X - M)
AD = C + I + G - (X - M)
AD = C + I - G + (X - M)
AD = C - I + G + (X - M)
#11
According to the wealth effect, what happens to consumption when there is an increase in household wealth?
Consumption increases
Consumption decreases
Consumption remains unchanged
Consumption becomes negative
#12
According to the multiplier effect, how does an initial increase in spending affect aggregate demand?
It has no effect on aggregate demand
It decreases aggregate demand
It increases aggregate demand by a larger amount
It increases aggregate demand by a smaller amount
#13
What is the effect of a decrease in disposable income on aggregate demand?
Aggregate demand increases
Aggregate demand decreases
Aggregate demand remains unchanged
Aggregate demand becomes negative
#14
According to the real-balances effect, what happens to consumption when there is a decrease in the price level?
Consumption increases
Consumption decreases
Consumption remains unchanged
Consumption becomes negative