PARTI MULTIPLE CHOICE Choose the single best answer by v One difference between the classical and fixed-price Keynesian models is that the aggregate supply curve is vertical in the fixed-price Keynesian model. B. money illusion may exist in the fixed-price Keynesian model. C. money illusion may exist in the classical model. U. wages, prices, and interest rates are fixed in the classical model. e. all of the above. 2. Which of the following will cause an increase in consumption spending? a. an increase in disposable income b. an increase in wealth c. an increase in consumer confidence d a decline in income inequality e. all of the above 3. In the fixed-price Keynesian model, equilibrium occurs where a> output - spending (Y = AE). b. leakages = injections ($ + [ + M) = (1+ G +X) c. spending = income (AL = ND. d. price level = output (P = Y). c. both a) and b). 4. A model that shows the quantity of real GDP that spenders in the economy are willing and able to purchase at different price levels is known as a. the consumption function. b. the aggregate expenditure function. c. the aggregate supply curve. d. the aggregate demand curve. e. the production function. 5. Assume an ordinary upward-sloping aggregate supply curve model. Which of the following events will lead to an increase in aggregate supply? @ a decrease in nominal wages b. an increase in resource prices c. a decrease in the value of the dollar compared to other currencies d. an increase in interest rates. e. a decline in capacity utilization