Practice Aggregate Demand And Its Components (4.1) - Determination of Income and Employment

Practise this section

8 questions

Flashcard drill
2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What does aggregate demand consist of?
Show hintHide hint
Think about the main components suggested in the section.
Question 2.
Define ex ante and ex post.
Show hintHide hint
Use the definitions provided in the glossary.
3Question 3.
What is the main component of aggregate demand?
- Consumption
- Taxation
- Savings
Show hintHide hint
Think about household spending.
4Question 4.
True or False: Ex ante measures are actual values of consumption and investment.
- True
- False
Show hintHide hint
Remember how these terms are defined.
Question 5.
A household anticipates their income will rise from $2,000 to $2,500, with an MPC of 0.75. Calculate the expected change in consumption.
Show hintHide hint
Use the MPC to see how consumption changes with income.
Question 6.
If aggregate demand increases due to a rise in investment, and investment is modeled as fixed, how does this affect overall income assuming fixed prices?
Show hintHide hint
Think about the multiplier from investment to consumption.

4 more questions in this section. Enroll free to practise them all.