Macroeconomics Quiz
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Questions and Answers

What does the aggregate demand curve illustrate in macroeconomics?

  • The relationship between the price level and the quantity of real GDP demanded by households, firms, and the government (correct)
  • The relationship between the interest rate and investment spending
  • The relationship between inflation and unemployment
  • The relationship between the exchange rate and net exports
  • What causes a movement along the aggregate supply curve in macroeconomics?

  • Changes in technology
  • Changes in consumer confidence
  • Changes in the price level (correct)
  • Changes in government spending
  • What is the impact of an increase in government spending on the aggregate demand curve?

  • Shifts the aggregate demand curve to the left
  • Leads to a change in the equilibrium price level
  • Shifts the aggregate demand curve to the right (correct)
  • Causes movement along the aggregate supply curve
  • In a free market economy, who primarily determines the allocation of resources?

    <p>Consumers and producers</p> Signup and view all the answers

    What is a characteristic of prices in a free market economy?

    <p>They are determined by supply and demand</p> Signup and view all the answers

    How does competition typically function in a free market economy?

    <p>By incentivizing efficiency and innovation</p> Signup and view all the answers

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