True or False:
1. Aggregate demand (AD) 5 Consumption (C) 1 Investment (I) 1 Government purchases (G) 1 Net exports (X 2 M).
2. Because consumption is such a stable part of GDP, analyzing its determinants is not important for an understanding of the forces leading to changes in aggregate demand.
3. Good business conditions tend to increase the level of investment by firms.
4. A $1 million increase in exports has a smaller direct effect on aggregate demand than a $1 million increase in government purchases.
5. Either an increase in exports or a decrease in imports would increase net exports.
6. Ceteris paribus, negative net exports would decrease aggregate demand.
7. The aggregate demand (AD) curve indicates the quantities of nominal GDP demanded at different price levels.
8. The AD curve is downward sloping for the same reasons that the demand curve for a particular product is downward sloping.