ECON 110 Chapter 20 COMPLETE EXAM LATEST VERSION 2026-
2027 QUESTIONS AND ANSWERS
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. - answer>>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 - answer>>D) reduces; reduces
3. A falling aggregate price level ____ demand for a country's exports and therefore _____ output
demanded.
A) increases; increases
B) increases; reduces
C) reduces; increases
D) reduces; reduces - answer>>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 - answer>>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 - answer>>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 - answer>>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.
A) decrease; stronger; higher
B) increase; weaker; higher
C) increase; stronger; lower
D) decrease; weaker; lower - answer>>A) decrease; stronger; higher
8. Which of the following is NOT a reason the aggregate demand curve is negatively sloped?
A) income effect
B) wealth effect
C) impact on exports
D) the interest rate effects - answer>>A) income effect
2027 QUESTIONS AND ANSWERS
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. - answer>>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 - answer>>D) reduces; reduces
3. A falling aggregate price level ____ demand for a country's exports and therefore _____ output
demanded.
A) increases; increases
B) increases; reduces
C) reduces; increases
D) reduces; reduces - answer>>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 - answer>>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 - answer>>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 - answer>>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.
A) decrease; stronger; higher
B) increase; weaker; higher
C) increase; stronger; lower
D) decrease; weaker; lower - answer>>A) decrease; stronger; higher
8. Which of the following is NOT a reason the aggregate demand curve is negatively sloped?
A) income effect
B) wealth effect
C) impact on exports
D) the interest rate effects - answer>>A) income effect
