Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. For each event that does shift a curve, use a diagram to illustrate the effect on the economy. a There is a reduction in household income tax. b A cyclone destroys the year’s wheat crop. c Households decide to have less children.
Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. For each event that does shift a curve, use a diagram to illustrate the effect on the economy. a There is a reduction in household income tax. b A cyclone destroys the year’s wheat crop. c Households decide to have less children.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter23: Aggregate Demand And Aggregate Supply
Section23.3: The Aggregate Demand Curve
Problem 3QQ
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Explain whether each of the following events shifts the short-run aggregate-supply curve,
the aggregate-demand curve, both, or neither. For each event that does shift a curve, use a
diagram to illustrate the effect on the economy.
a There is a reduction in household income tax.
b A cyclone destroys the year’s wheat crop.
c Households decide to have less children.
d A significant amount of iron ore is found in Western Australia, capable of supplying
world trade for the next 50 years.
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