Effects of ad-as model on aggregate demand

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1)A cut in government spending, a decrease in income abroad, an increase in taxes, or an expectation that future consumer income will fall will all cause aggregate:

A) demand to shift outward

B) demand to shift inward

C) supply to shift outward

D) supply to shift inward

E) supply and aggregate demand to both shift equally inward


2) Along the classical or vertical range of the aggregate supply curve, an increase in the aggregate demand curve will increase:

A) both the price level and real GDP

B)only real GDP

C)only the price level

D)real GDP and reduce the price level


3)Using the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then:

A)aggregate demand will decrease

B)aggregate demand will increase

C)long-run aggregate supply will increase

D)long-run aggregate supply will decrease

Reference no: EM13174478

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