The given statements pertain to aggregate supply and aggregate demand. Label each statement as being either true or false.
Statement 1: An increase in the cost of energy affects both aggregate supply and aggregate demand.
A. True
B. False
Statement 2: One of the factors that increase aggregate demand is the consumption of more imports.
A. True
B. False
Statement 3: If the value of people's stock portfolios increases or if peoples houses appreciate in value, then this very easily could lead to an increase in aggregated demand.
A. True
B. False

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Answer:

Statement 1: An increase in the cost of energy affects both aggregate supply and aggregate demand.

  • A. True

An increase in energy costs reduces both aggregate supply and demand.

Statement 2: One of the factors that increase aggregate demand is the consumption of more imports.

  • B. False

If net exports decrease (exports - imports), then the aggregate demand curve will shift to the left, which means it will decrease.

Statement 3: If the value of people's stock portfolios increases or if peoples houses appreciate in value, then this very easily could lead to an increase in aggregated demand.

  • A. True

This would lead to an increase in the net worth of households, which generally leads to higher spending.

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