If Investment Spending Increases by $1 Million, Then the Aggregate

question 40

Multiple Choice

If investment spending increases by $1 million, then the aggregate demand curve shifts

• A) leftward by less than $1 million.
• B) rightward by $1 million.
• C) rightward by less than $1 million.
• D) rightward by more than $1 million.
• E) leftward by more than $1 million.

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Definitions:

Foreign Demand

The desire and willingness of buyers in other countries to purchase goods and services from a particular country.

Consumer Surplus

The difference in the total funds consumers are prepared to allocate for a good or service against the total funds they genuinely allocate.

Consumer Surplus

The contrast in the total money consumers are willing to shell out for a good or service versus what they truly pay.

Speculative Demand

Demand driven not by the direct benefits one obtains from owning or consuming a good but instead by an expectation that the price of the good will increase.