Question

In: Economics

4. If a country increases the amount of goods it imports but its exports remain unchanged:...

4. If a country increases the amount of goods it imports but its exports remain unchanged:

	A.	AD would not shift.
	B.	AD shifts right.
	C.	AD shifts left.
	D.	AD would shift but in a random direction.

7. Rising confidence in the economy shifts the aggregate demand curve to the left.

	A.	False
	B.	True

8. An increase in net export spending will result in a(n):

	A.	increase in aggregate supply.
	B.	decrease in aggregate supply.
	C.	increase in aggregate demand.
	D.	decrease in aggregate demand.

12. The decline in aggregate demand that occurred during the Great Depression caused a drop in real GDP:

	A.	but a modest rise in inflation.
	B.	and deflation.
	C.	but no change in the price level.
	D.	but an increase in the price level.

Expert Solution

1.

The answer is C.

AD shifts left.

Increase in imports but not exports would decrease net exports ie NX

AD=C+I+G+NX

Assuming no change in other variables,this will reduce AD and AD would shift left.

2.

The answer is FALSE

An increase in consumer confidence will shift the AD curve to the right.

3.

The answer is C.

increase in aggregate demand.

AD=C+I+G+NX

Assuming no change in other variables,this will increase AD and AD would shift right.

4.

The answer is B.

and deflation.

The decline in aggregate demand that occurred during the Great Depression caused a drop in real GDP and falling prices level.

Rahul Sunny answered 2 years ago

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