1. Which of the following provides a correct definition of aggregate supply? a)
ID: 1150929 • Letter: 1
Question
1. Which of the following provides a correct definition of aggregate supply?
a) Aggregate supply is the quantity of domestic product that is supplied at each possible income level, ceteris paribus.
b) Aggregate supply is the quantity of domestic product that is supplied at each possible price level, ceteris paribus.
c) Aggregate supply is the quantity of domestic product that is supplied at each possible price level.
d) Aggregate supply is the quantity of domestic product that is demanded by the rest of the world, ceteris paribus.
2. Which of the following provides a correct definition of aggregate demand?
a) Aggregate demand is the quantity of domestic product that is demanded at each possible income level, ceteris paribus.
b) Aggregate demand is the quantity of domestic product that is supplied at each possible price level, ceteris paribus.
c) Aggregate demand is the quantity of domestic product that is demanded at each possible price level.
d) Aggregate demand is the quantity of domestic product that is demanded by the rest of the world, ceteris paribus.
e) None.
3. Independent consumption
a) Represents a component of consumption that is independent of the disposable income.
b) Decreases when consumer wealth goes down.
c) Decreases when consumer wealth goes up.
d) Represents the minimum level of consumption when disposable income is zero.
e) a, b and c.
4. An increase in the general price level
a) Decreases consumption by increasing consumer wealth.
b) Decreases the real value of the money fixed assets.
c) Shifts the consumption function upward.
d) a and b.
5. Theoretically, a higher level of interest rate
a) Discourages consumption.
b) Shifts the consumption line upward.
c) Lowers the reward for saving.
d) Discourages investment.
e) Both a and d.
6. Which of the following shifts the investment curve upward?
a) An increase in disposable income.
b) A decrease in the rate of inflation..
c) A decrease in the real interest rate.
d) None of the above.
7. Everything else constant, inflation
a) leads to an increase in a country’s net exports.
b) Leads to a reduction in a country’s net exports.
c) Increases the inventories below the desired level.
d) b and c.
e) a and c.
8. Everything else constant, when a country’s money depreciates in value
a) Its net exports tend to increase.
b) Its net exports tend to decrease.
c) Its net exports tend to remain unchanged.
9. Which of the following are true?
a) Our exports are relatively insensitive to our national income.
b) Our exports fall when our national income rises.
c) When our economy grows faster than the economies of our trading partners our net exports tends to decrease.
d) a and c.
e) b and c.
10. Which of the following statements best represent the definition of the demand side equilibrium GDP?
a) The demand side equilibrium GDP is the level of GDP at which there is no recession or inflation.
b) The demand side equilibrium GDP is the level of GDP at which aggregate supply exceeds aggregate demand.
c) The demand side equilibrium GDP is the level of GDP at which firms have no incentive to increase or decrease their total product.
d) c and a.
Explanation / Answer
Ans
1 B and some right. It shows what is supplied at each price given other things
2 c is right. It shows what is demanded in economy at each price
3 A is right
4 b. As price rise real value decreases
5 D. There is inverse relationship
6 b. Lower inflation means investment is less common stly
7 b the same right
8 A. Exports become cheaper and imports dear
9 E is right. We consume more of goods and import more
10 D is right
Was required to answer only 4 parts according to Chegg policy but still answered all. Please like answer
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