State how each of the following affect the aggregate demand ...

[stephzh]

State how each of the following affect the aggregate demand curve.
  a. The price level increases.
  b. Consumers expect higher inflation in the future.
  c. The exchange rate rises.
  d. Foreign income decreases.
 
  What will be an ideal response?

Question 2

Which of the following occurs if the real interest rate falls?
 
  A) The quantity of loanable funds demanded increases and there is a movement down along the demand for loanable funds curve.
  B) The quantity of loanable funds demanded decreases increases and there is a movement up along the demand for loanable funds curve.
  C) The quantity of loanable funds demanded increases and the demand for loanable funds curve shifts rightward.
  D) The demand for loanable funds decreases and the demand for loanable funds curve shifts leftward.
  E) The demand for loanable funds increases and the demand for loanable funds curve shifts rightward.

[Ksanderson1296]

Answer to Question 1

a. There is a movement upward along the aggregate demand curve. The aggregate demand curve does not shift.
b. The aggregate demand curve shifts rightward.
c. The aggregate demand curve shifts leftward.
d. The aggregate demand curve shifts leftward.

Answer to Question 2

A

[stephzh]

Excellent

[LVPMS]

Wow, this really help