1. Which of the following changes will result in a shift of the aggregate demand curve, and which will result in a movement along the curve? If there is a shift, or a movement, be sure to explain in which direction, and why (either up or down, or, right or left). 1 pt each a. The Fed lowers interest rates. b. The price level in the economy falls. c. Wealth decreases. d. A foreign trading partner’s national income increases. 2. With a two panel diagram –one panel showing the aggregate expenditure diagram, and the other showing the AD curve – show how a decrease consumption shifts the AD curve. 2 pts 3. What will happen to the aggregate supply curve if the price of foreign oil decreases? Will it cause a movement along the curve or a shift of the curve? Explain clearly. 2 pts 4. Is there any difference between the aggregate demand curve and the demand curve for good x? Explain . .

1. 1. Which of the following changes will result in a shift of the
aggregate demand curve, and which will result in a movement
along the curve? If there is a shift, or a movement, be sure to
explain in which direction, and why (either up or down, or,
right or left). 1 pt each
a. The Fed lowers interest rates.
b. The price level in the economy falls.

2. c. Wealth decreases.
d. A foreign trading partner’s national income increases.

3. 2. With a two panel diagram –one panel showing the aggregate
expenditure diagram, and the other showing the AD curve –
show how a decrease consumption shifts the AD curve.
2 pts

5. 3. What will happen to the aggregate supply curve if the price
of foreign oil decreases? Will it cause a movement along the
curve or a shift of the curve? Explain clearly. 2 pts

6. 4. Is there any difference between the aggregate demand curve
and the demand curve for good x? Explain .