Question 1

What two variables are determined in an aggregate supply-aggregate demand figure?
 Is the slope of the aggregate supply curve positive or negative?
 Is the slope of the aggregate demand curve positive or negative?

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Question 2

How does the aggregate demand curve reflect an increase in aggregate demand?

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Question 3

"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect?
 Briefly explain your answer.

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Question 4

What are the two channels through which the world economy can affect U.S.aggregate demand?
 State what changes in the world economy can increase U.S.aggregate demand.

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Question 5

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP, equal potential GDP, and exceed potential GDP?

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Question 6

State how shifts in the aggregate demand curve can explain the movement of real GDP around potential GDP.

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Question 7

How does a recession in Asia affect U.S.aggregate demand and the U.S.aggregate demand curve?

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Question 8

-In the above figure, illustrate the effect on the AS curve from an increase in the money price of a key resource such as oil.

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-In the above figure, illustrate the effect...

Question 9

-What can lead to the shift illustrated in the figure above?

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-What can lead to the shift illustrated...

Question 10

What is the effect on the aggregate demand curve from an increase in the price level?
 In particular, does the aggregate demand curve shift leftward or rightward?

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Question 11

State how each of the following affect the aggregate demand curve.
a. The price level increases.
b. Consumers expect higher inflation in the future.
c. The exchange rate rises.
d. Foreign income decreases.

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Question 12

Explain the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve.

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Question 13

"The aggregate demand multiplier results in the aggregate demand curve shifting by more than any given initial change in expenditure." Is the previous statement correct or incorrect?

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Question 14

Can actual real GDP exceed potential GDP?

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Question 15

How does an increase in the price level affect the aggregate quantity of goods and services demanded?

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Question 16

How does a cut in interest rates that increases investment affect the quantity of real GDP demanded, the aggregate demand curve, real GDP, and the price level?

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Question 17

Explain how changes in foreign income can impact real GDP in a country.

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Question 18

Give examples of factors that decrease aggregate demand.Which way does the aggregate demand curve shift?

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Question 19

How does a rise in the foreign exchange rate affect aggregate demand in the United States?
 Explain your answer.

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Question 20

What is the aggregate demand multiplier and why does it occur?

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Quiz 13: Aggregate Supply and Aggregate Demand

What two variables are determined in an aggregate supply-aggregate demand figure? Is the slope of the aggregate supply curve positive or negative? Is the slope of the aggregate demand curve positive or negative?