ECON 110 CHAPTER 20 EXAM QUESTIONS AND ANSWERS 100% PASS 2026/2027

ECON 110 CHAPTER 20 EXAM
QUESTIONS AND ANSWERS 100% PASS
2026/2027




The aggregate demand curve slopes _____ and has _____ on the vertical axis.

A) downward; output

B) downward; the price level

C) upward; output

D) upward; the price level

2. - ANS B) downward; the price level



2. Because of the wealth effect, a rising aggregate price level ____ the purchasing power of
wealth and therefore _____ output demanded.

A) increases; increases

B) increases; reduces

C) reduces; increases

D) reduces; reduces - ANS D) reduces; reduces



3. A falling aggregate price level ____ demand for a country's exports and therefore _____
output demanded.

A) increases; increases


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, B) increases; reduces

C) reduces; increases

D) reduces; reduces - ANS A) increases; increases



4. A rising aggregate price level _______ an economy's interest rates and therefore _____
output demanded.

A) increases; increases

B) increases; reduces

C) reduces; increases

D) reduces; reduces - ANS B) increases; reduces



5. Increased taxes will shift the aggregate demand curve to the _____ and _____ output
demanded.

A) left; decrease

B) left; increase

C) right; increase

D) right; decrease - ANS A) left; decrease



6. A stronger dollar will shift the U.S. aggregate demand curve to the _____ and _____ output
demanded.

A) left; decrease

B) left; increase

C) right; increase

D) right; decreas - ANS A) left; decrease



7. A(n) __________ in government spending, a __________ domestic currency, and ________
interest rates will shift a country's aggregate demand to the left.

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