Reading 23: Aggregate Supply and Aggregate Demand - LOS b,

答案和详解如下：

1.Which of the following statements concerning aggregate demand is most accurate?

A)   When price levels rise, real wealth increases, and individuals will spend more.

B)   When price levels rise, real wealth decreases, and individuals will spend less.

C)   When price levels fall, real wealth increases, and individuals will spend less.

D)   When price levels fall, real wealth decreases, and individuals will spend more.

The correct answer was B)

When price levels rise, real wealth decreases, and we would expect individuals to spend less. If the converse were also true—if price levels were to fall—real wealth should increase, and we would expect individuals to spend more, all else being equal.

2.Which of the following is NOT a reason that the aggregate demand curve slopes downward?

A)   The wealth effect causes consumers to spend less when the price level rises.

B)   Higher interest rates encourage consumers to delay major purchases.

C)   Because entitlements are adjusted for inflation, a rising price level forces government spending to increase.

D)   Business investment declines as a rising price level increases interest rates.

The correct answer was C)

The aggregate demand curve plots real GDP against the price level. Rising entitlement payments that result from an increasing price level affect nominal GDP, but not real GDP. The other choices describe reasons why the consumption and investment components of real GDP decrease when the price level increases.

3.An increase in interest rates can be expected to:

A)   decrease investment and increase net exports.

B)   increase government spending and decrease investment.

C)   decrease investment and decrease consumption.

D)   increase government spending and decrease consumption.

The correct answer was C)

An increase in interest rates can be expected to decrease business investment and decrease consumption. The impact on government spending and net exports is not clear-cut.

4.Which of the following least accurately describes a component of aggregate demand?

A)   Consumption.

B)   Net imports.

C)   Investment.

D)   Government spending.

The correct answer was B)

The components of aggregate demand are consumption, investment, government spending, and net exports, which is exports minus imports.