ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
upward/leftward movement along the demand curve.
|
|
|
downward/rightward movement along the demand curve.
|
|
|
rightward shift of the demand curve.
|
|
|
leftward shift of the demand curve.
|
|
|
there would be no movement along or of the demand curve.
|
Detailed explanation-1: -The aggregate demand curve shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise. The AD curve will shift back to the left as these components fall.
Detailed explanation-2: -Since the aggregate demand/aggregate supply (AD/AS) model represents price as price level and quantity as output, a rightward shift of the aggregate demand curve results in an increase in the price level and an increase in output.
Detailed explanation-3: -In the most general sense (and assuming ceteris paribus conditions), an increase in aggregate demand corresponds with an increase in the price level; conversely, a decrease in aggregate demand corresponds with a lower price level.
Detailed explanation-4: -Generally, an increase in demand is depicted from a rightward shift of the demand curve and a decrease in demand is depicted from the leftward shift of the demand curve.
Detailed explanation-5: -The aggregate demand curve tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased.