Answer the question on the basis of the following aggregate demand and supply schedules for a hypothetical economy: $\begin{array}{c}
\begin{array}{c}
\text {Amount of Real }\
\underline{\text {Output Demanded}}\
\$ 200 \
300 \
400 \
500 \
600
\end{array}
\begin{array}{c}
\text {Price Level}\
\underline{\text {(Index Value)}}\
300\
250\
200\
150\
100
\end{array}
\begin{array}{c}
\text {Amount of Real}\
\underline{\text {Output Supplied}}\
\$ 500 \
450 \
400 \
300 \
200
\end{array}
\end{array}$ Refer to the data.If the amount of real output demanded at each price level falls by $200,this might have been caused by:
A) an increase in net exports.
B) a worsening of business expectations.
C) an increase in consumer wealth.
D) a decrease in the personal income tax.

Question

Quizplus · Accepted Answer

A decrease in the amount of real output demanded at each price level suggests a decrease in consumer spending and investment, which could be caused by a worsening of business expectations. An increase in net exports, increase in consumer wealth, or decrease in personal income tax would typically lead to an increase in aggregate demand and real output demanded.

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