Q20. An increase in aggregate demand is shown by

a. a rightward shift in the aggregate demand curve.

b. a movement up along the aggregate demand curve.

c. a movement down along an aggregate demand curve.

d. a leftward shift in the aggregate demand curve.

Q25. Real GDP can increase as a result of

a. a decrease in aggregate supply.

b. inflation.

c. a decrease in aggregate demand.

d. an increase in aggregate demand.

Q27. If the marginal propensity to consume is .9 and there is a $3 billion increase in planned investment, national income will increase by

a. $3.0 billion.

b. $30.0 billion.

c. $6.0 billion.

d. $2.7 billion.

Q47. Which of the following is TRUE?

a. M2 is always larger than M1.

b. M1 is always larger than M2.

c. Credit card accounts are included in M1 but not in M2.

d. M2 is the narrowest definition of the money supply.

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