The aggregate demand curve in the following graph will shift from ad1 to ad0 if

YAD1AD0ABP-Sheet 5Mcq question1.The Aggregate Demand curve in the following graphwill shift from AD1to AD0if(a)the output level decreased(b)the price level increased(c)net taxes increased(d)the money supply decreased

2 .In the same graph above the economy would move from point A to B along the AD0curve if

The aggregate demand curve in the following graph will shift from ad1 to ad0 if

3.Aggregate supply refers to:

C)the total quantity of goods and services that the nation’s government willingly produce andsell in a given period of time.D)the total quantity of goods and services that the nation’s businesses hope to produce andsell in a given period of time.

1. The interest-rate effect suggests that:
A. a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending.
B. an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending.
C. an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
D. an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.

2. The foreign purchases effect suggests that a decrease in the Albanian price level relative to other countries will:
A. shift the aggregate demand curve leftward.
B. shift the aggregate supply curve leftward.
C. decrease Albanian exports and increase Albanian imports.
D. increase Albanian exports and decrease Albanian imports.

3. The foreign purchases effect: 
A. shifts the aggregate demand curve rightward.
B. shifts the aggregate demand curve leftward.
C. shifts the aggregate supply curve rightward.
D. moves the economy along a fixed aggregate demand curve.

4. Other things equal, if the national incomes of the major trading partners of Albania were to rise, Albanian:
A. aggregate demand curve would shift to the right.
B. aggregate supply curve would shift to the left.
C. aggregate supply curve would shift to the right.
D. aggregate demand curve would shift to the left.

5. Which one of the following would not shift the aggregate demand curve?
A. a change in the price level
B. depreciation of the international value of the dollar
C. a decline in the interest rate at each possible price level
D. an increase in personal income tax rates

6. Other things equal, a decrease in the real interest rate will:
A. expand investment and shift the AD curve to the left.
B. expand investment and shift the AD curve to the right.
C. reduce investment and shift the AD curve to the left.
D. reduce investment and shift the AD curve to the right.

7. An increase in net exports will shift the AD curve to the:
A. left by a multiple of the change in investment.
B. left by the same amount as the change in investment.
C. right by the same amount as the change in investment.
D. right by a multiple of the change in investment.

8. If investment increases by $10 billion and the economy's MPC is .8, the aggregate demand curve will shift:
A. leftward by $50 billion at each price level.
B. rightward by $10 billion at each price level.
C. rightward by $50 billion at each price level.
D. leftward by $40 billion at each price level.

9. Which of the following would most likely shift the aggregate demand curve to the right?
A. An increase in stock prices that increases consumer wealth.
B. Increased fear that a recession will cause workers to lose their jobs.
C. An increase in personal income tax rates.
D. A reduction in household borrowing because of tighter lending practices.

10. In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to:
A. affect neither aggregate supply nor aggregate demand.
B. increase aggregate demand.
C. reduce aggregate demand.
D. reduce aggregate supply.

11. The immediate-short-run aggregate supply curve is:
A. downward sloping.
B. upward sloping.
C. vertical.
D. horizontal.

12.In the above diagram, the economy's immediate-short-run AS curve is line ___, its short-run AS curve is _____, and its long-run AS curve is line ___.
A. 1; 2; 4
B. 1; 2; 3
C. 2; 3; 4
D. 3; 2; 1

13 The shape of the immediate-short-run aggregate supply curve implies that:
A. total output depends on the volume of spending.
B. increases in aggregate demand are inflationary.
C. output prices are flexible, but input prices are not.
D. government cannot bring an economy out of a recession by increasing spending.

14 The aggregate supply curve (short-run):
A. graphs as a horizontal line.
B. is steeper above the full-employment output than below it.
C. slopes downward and to the right.
D. presumes that changes in wages and other resource prices match changes in the price level.

15 The aggregate supply curve (short-run) is upsloping because:
A. wages and other resource prices match changes in the price level.
B. the price level is flexible upward but inflexible downward.
C. per-unit production costs rise as the economy moves toward and beyond its full-employment real output.
D. wages and other resource prices are flexible upward but inflexible downward.

16 In the above diagram, a shift from AS1 to AS3might be caused by a(n):
A. increase in productivity.
B. increase in the prices of imported resources.
C. decrease in the prices of domestic resources.
D. decrease in business taxes.

17 In the above diagram, a substantial appreciation of the Albanian Lek with no immediate change in the Albanian price level would result in a:
A. movement upward along an existing aggregate supply curve such as AS1.
B. movement downward along an existing aggregate supply curve such as AS1.
C. rightward shift of the aggregate supply curve, such as from AS1 to AS2.
D. leftward shift of the aggregate supply curve, such as from AS1 to AS3.

18 Which one of the following would increase per unit production cost and therefore shift the aggregate supply curve to the left?
A. a reduction in business taxes
B. production bottlenecks occurring when producers near full plant capacity
C. an increase in the price of imported resources
D. deregulation of industry

19 Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate:
A. demand curve will shift leftward.
B. supply curve will shift rightward.
C. supply curve will shift leftward.
D. expenditures curve will shift downward.

20 The level of productivity in the above economy is:
A.     2.
B.     .5.
C.     4.
D.     200.

21 If the price of each input is $5, the per-unit cost of production in the above economy is:
A.     $5.
B.     $2.75.
C.     $2.50.
D.     $.40.

22 Refer to the above data. The equilibrium price level will be:
A.     150.
B.     200.
C.     250.
D.     300.

23 Refer to the above data. If the price level is 150 and producers supply $300 of real output:
A. a shortage of real output of $200 will occur.
B. a shortage of real output of $100 will occur.
C. a surplus of real output of $300 will occur.
D. neither a shortage nor a surplus of real output will occur.

24 Graphically, demand-pull inflation is shown as a:
A. rightward shift of the AD curve along an upsloping AS curve.
B. leftward shift of the AS curve along a downsloping AD curve.
C. leftward shift of AS curve along an upsloping AD curve.
D. rightward shift of the AD curve along a downsloping AS curve.

25 Graphically, the full-employment, low-inflation, rapid-growth economy of the last half of the 1990s is depicted by a:
A. rightward shift of the aggregate demand curve along a fixed aggregate supply curve.
B. rightward shift of the aggregate supply curve along a fixed aggregate demand curve.
C. rightward shift of the aggregate demand curve and a rightward shift of the aggregate supply curve.
D. leftward shift of the aggregate demand curve and a leftward shift of the aggregate supply curve.

26 Refer to the above diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. A recession is depicted by:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (A) and (B).

27 Refer to the above diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Cost-push inflation is depicted by:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (B) and (C).

28 Refer to the above diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, an increase in investment spending is depicted by:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (B) and (C).

29 Refer to the above diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, a decline in productivity is depicted by:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (B) and (C).

30 If aggregate demand decreases, and as a result, real output and employment decline but the price level remains unchanged, it is most likely that:
A. the money supply has declined.
B. the price level is inflexible downward and a recession has occurred.
C. cost-push inflation has occurred.
D. productivity has declined.

31 A rightward shift of the AD curve in the very steep upper part of the upsloping AS curve will:
A. increase real output by more than the price level.
B. increase the price level by more than real output.
C. reduce real output by more than the price level.
D. reduce the price level by more than real output.

32 A rightward shift of the AD curve in the very flat part of the upsloping AS curve will:
A. increase real output by more than the price level.
B. increase the price level by more than real output.
C. reduce real output by more than the price level.
D. reduce the price level by more than real output.

33 A decrease in aggregate demand will cause a greater decline in real output the:
A. less flexible is the economy's price level.
B. more flexible is the economy's price level.
C. steeper is the economy's AS curve.
D. larger is the economy's marginal propensity to save.

34 Refer to the above diagram. If the aggregate supply curve shifted from AS0 to AS1, we could say that:
A. aggregate supply has increased, equilibrium output has decreased, and the price level has increased.
B. aggregate supply has decreased, equilibrium output has decreased, and the price level has increased.
C. an increase in the amount of output supplied has occurred.
D. aggregate supply has increased and the price level has risen to G.

35. Refer to the above diagram. If aggregate supply is AS1 and aggregate demand is AD0, then:
A. at any price level above G a shortage of real output would occur.
B. F represents a price level that would result in a surplus of real output of AC.
C. a surplus of real output of GH would occur.
D. F represents a price level that would result in a shortage of real output of AC.

What would cause the AD curve to shift to AD1?

On the other hand, when the government increases taxes or reduces expenditure, consumer wealth decreases, which contracts the real GDP and shifts the aggregate demand curve to the left to AD1.

Which of the following would shift the aggregate demand curve from AD2 to AD1?

Which of the following would shift the aggregate demand curve from AD2 to AD1? nominal wages and other input prices are fixed. change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500.

Which of the following factors will shift AD1 to AD2?

Which of the following factors will shift AD1 to AD2? A decrease in the general price level.

Which of the following shifts the aggregate demand curve?

A change in the price level causes a movement along the AD curve, while factors that affect the components of GDP (consumption, investment, government spending, net exports) will shift the AD curve.