1. The aggregate demand and aggregate supply graph has

a. quantity of output on the vertical axis. Output can be measured by the GDP deflator.

b. quantity of output on the vertical axis. Output can be measured by real GDP.

c. quantity of output on the horizontal axis. Output can be measured by the GDP deflator.

d. quantity of output on the horizontal axis. Output can be measured by real GDP.

2. Which of the following would not be included in aggregate demand?

a. purchases of goods by households.

b. governments tax collections

c. firms purchases of newly produced machinery

d. an increase in firms invetories