Figure 13-2 Shows Shifts in the Aggregate Demand Curve

question 1

Multiple Choice

Figure 13-2 shows shifts in the aggregate demand curve. Which of the following combinations would be illustrated by a shift in aggregate demand from AD₀ to AD₁?Figure 13-2

• A)A slow increase in government purchases combined with a large decrease in investment
• B)An increase in consumption combined with an increase in exports
• C)An increase in business tax rates combined with a decrease in consumer confidence
• D)An increase in the growth rates of a major trading partner combined with a severe slowdown in stock market wealth
• E)An increase in exports combined with an even larger increase in imports

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Definitions:

Sensory Memory

The shortest-term element of memory, it allows the ability to retain impressions of sensory information after the original stimuli have ended.

Limited-Capacity

The concept that there is an upper limit on the amount of information or number of tasks that an individual can process or perform at one time.

Unrehearsed Information

Information that has not been actively reviewed or practiced, often leading to its being forgotten or not well-integrated into memory.

Short-Term Memory

The capacity for holding a small amount of information in mind in an active, readily available state for a short period of time.