When Deriving the Aggregate Demand (AD) Curve from the Aggregate

question 191

Multiple Choice

When deriving the aggregate demand (AD) curve from the aggregate expenditures model, an increase in U.S. product prices would cause an increase in

• A) the value of household wealth and lower consumption expenditures.
• B) interest rates and lower investment expenditures.
• C) exports and imports.
• D) U.S. resource prices and an increase in aggregate supply.

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Definitions:

Bystander Effect

A phenomenon where individuals are less likely to offer help to a victim when other people are present.

Social Loafing

The phenomenon where individuals exert less effort when working in a group than when working alone.

Group Polarization

The phenomenon where a group's prevailing opinions or decisions become more extreme following discussion among its members.

Diffusion of Responsibility

A phenomenon where individuals are less likely to take action or feel responsible in the presence of a large group of people.