Figure 3 Price Level AS AD Real GDP 31. In figure 3, if aggregate demand falls:

ID: 1121341 • Letter: F

Question

Figure 3 Price Level AS AD Real GDP 31. In figure 3, if aggregate demand falls: the price level rises the price level falls real GDP rises d. real GDP falls e. none of the above a. b. c. 32. In figure 3, if aggregate supply increases, real GDP d the price level falls a. increases an b. d. and the price level fall e. none of the above falls and the price level rises and the price level rise c. 33. In figure 3, aggregate demand will decrease if. a. the money supply increase b. government expenditure rises c. tax receipts are increased d. all of the above e. none of the above 34. In figure 3 aggregate supply will increase if a. b. c. technology improves R&D; subsidies are increased tax rates fall d. all of the above e. none of the above 35. In figure 3, if the FED buys bonds on the open market then AD: a. and the price level increases b. and the price level decrease e none of the above c. increase and the price level falls d. falls and the price level rises

Explanation / Answer

31. Option b is correct (AD shifts to the left and price level falls)

32. Option a is correct (AS shifts to the right)

33. Option c is correct (increase in tax receipts would shift the AD curve to the left)

34. Option d is correct (All of the above would lead to a higher output at each price level)

35. Option a is correct (this would increase the money supply and shift the AD curve to the right)

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Figure 3 Price Level AS AD Real GDP 26. In figure 3, if investment rises, then:

Figure 3 Price per unit S+tax S, o+tax So Tax Demand 0 ap Qc Quantity Figure 3 s

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Figure 3 Price Level AS AD Real GDP 31. In figure 3, if aggregate demand falls:

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