Q1. Aggregate Demand (AD) is defined as C + I + G + (X-M). C refers to ________.

a.consumption spending

b.customers

c.cost

Q4. The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels?

a.Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.

b.Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper.

c.Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper.

Q5. Components of aggregate demand include all of the following EXCEPT

a.government spending.

b.firms' demand for inputs.

c.investment spending.