70) If the price level increases, there is demanded- A) a movement upward along;

Question

70) If the price level increases, there is demanded- A) a movement upward along; increases B) a movement downward along: increases C) a movement upward alongs decreases D) a leftward shift in; decreases E) no change in; does not change the AD curve and the quantity of real GDP 71) When the price level tises and increases the demand for money, the nominal interest rate and the real interest rate A) rises; rises B) rises; falls C) falls; rises D) falls; falls E) does not change; does not change 72) In the short run, a rise in the price level brings a inthe real interest rate that investment, bringing in the quantity of real GDP demanded. A) rise; decreases; adecrease B) fall; decreases; a decrease C, fall; increases; an increase D) rise; increases; an increase E) rise; decreases; an increase 73) A rise in the US. price level brings s_ that exports of US, goods, bringing in the price of US. exports relative to imports in the quantity of US real GDP A) rise; decreases; a decrease B) fall; decreases; a decrease C) fall; increases; an increase D) rise; increases; an increase B) rise; increases; a decrease 74) The aggregate demand curve shifts when any of the following factors change EXCEPT A) foreign income. B) the price level C) monetary policy D) expectations about the future. E) fiscal policy. 75) Changes in cause a movement along the aggregate demand curve while changes in shift the aggregate demand curve. A) price level; taxes B) taxes; government spending C) govenment spending; price level D) money wage rate; price level E) price level, money wage rate

Explanation / Answer

70.

C.

There will be upward movement in the AD curve with increase in the price level. It will reduce the real GDP demanded at the higher price level.

71.

D.

Nominal as well as real interest rates will fall.

72.

A

In the short run, the real interest rate will rise that will discourage the firms to make investment expenditure. Further, real GDP demanded will also come down.

73.

A

Increase in price level, will increase the price of exports in the international market that will make the export to lose price advantage. It will cause the export to come down and real GDP also comes down.

74.

B

Due to change in price level, the movement will be along the curve, but shift in the AD curve will not take place. AD

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