The Table Gives Aggregate Demand and Supply Schedules for a
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question 74

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Amount of Real Output } \\\text { Demanded }\end{array} & \text { Price Level (Index Value) } & \begin{array} { c } \text { Amount of Real Output } \\\text { Supplied }\end{array} \\\hline \$ 200 & 300 & \$ 500 \\\hline 300 & 250 & 450 \\\hline 400 & 200 & 400 \\\hline 500 & 150 & 300 \\\hline 600 & 100 & 200 \\\hline\end{array}$$ The table gives aggregate demand and supply schedules for a hypothetical economy. If the amount of real output demanded at each price level falls by $200, this might have been caused by

• A) an increase in net exports.
• B) a worsening of business expectations.
• C) an increase in consumer wealth.
• D) a decrease in the personal income tax.

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Definitions:

Government Bonds

Securities issued by a government to raise funds from the public, promising to pay back with interest at a future date.

Excess Supply

A situation where the quantity of a good or service that is available surpasses the quantity demanded at a current price, often leading to a price decrease.

Value of Money

The purchasing power of money, which can be affected by inflation and economic conditions.

Price Fell

A situation where the market price of a good or service decreases.