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- Shortly before the start of the recession in 2008, housing prices fell and wealth declined. The aggregate supply/demand model suggests this caused A. a decline in consumption and a decrease in aggregate demand. B. a decline in investment and a decrease in aggregate demand. C. a rise in consumption and decrease in aggregate demand. D. a decline in consumption and an increase in short-run aggregate supplyExplain whether each of the following events shiftsthe short-run aggregate-supply curve, the aggregatedemand curve, both, or neither. For each event thatdoes shift a curve, draw a diagram to illustrate theeffect on the economy.a. Households decide to save a larger share of theirincome.b. Florida orange groves suffer a prolonged period ofbelow-freezing temperatures.c. Increased job opportunities overseas cause manypeople to leave the country.What is the effect of an increase in investment? When investment increases, A. aggregate demand increases and income increases. The increase in income induçes an increase in consumption expenditure so aggregate demand increases by more than the initial increase in investment B. aggregate demand increases and aggregate supply increases C. aggregate demand increases by an amount equal to the increase in investment O D. aggregate supply increases. The increase in aggregate supply is greater than the increase in investment because capital increases, which increases potential GDP Click to select your answer. MacBook Air DII F11 F12 888 F10 F9 吕0 F7 F8 F6 F5 F4 esc F2 F3 F1 # $ delete @ 7 8 1 2 3 4 P Y Q W E R %3D tab つ K S D F G A aps lock M V B ootion * 00 I くO
- Which one of the following variables is not held constant along a given aggregate demand curve? Select one: A. fiscal policy B. monetary policy C. expectations about inflation D. the price level O E. the exchange rateAssume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rateWhich of the following shifts aggregate demand to the left? Select one: a. an increase in imports Ob. a decrease in taxes c. None of the other choices are correct O d. a decrease in interest rates O e. an increase in exports
- What effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output. Assume all other things remain constant.a. A widespread fear of depression on the part of consumers.b. A $2 increase in the excise tax on a pack of cigarettes.c. A reduction in interest rates at each price level.d. A major increase in Federal spending for health care.e. The expectation of rapid inflation.f. The complete disintegration of OPEC, causing oil prices to fall by one-half.g. A 10 percent reduction in personal income tax rates.h. A sizable increase in labor productivity (with no change in nominal wages).i. A 12 percent increase in nominal wages (with no change in productivity).j. Depreciation in the international value of the dollar.Explain under the following circumstances what will happen to the aggregate demand and/or aggregate supply. a. People have less disposable income on their hand due to an increase in the taxes b. Investors thinks the market soon going to face recession and therefore, expect less returns C. The U.S government limits the number of working visas d. Less foreigners are investing in the U.S in the form of Foreign Direct Investment Make sure to provide reasoning for your response. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial == ווין T {;} P RA KJ X² X₂ 10pt >¶¶< + ABC ¶T ¶¶ Ω Θ Ix X X Q5 88 : A = 旺图 O WORDS POWERED BY TINYIllustrate and interpretthe short-run andlong-run aggregatesupply curves
- An economic recession means that _______. a. GDP is critically high b. Output and employment is down c. Employment is increasing d. Output is increasingWhich of these will cause aggregate demand to shift to the right? a. Increasing tax rates on salaries and income of consumers O b. Reducing the spending of the government O c. Importing more products from other countries d. Lowering down interest ratesThe aggregate supply-aggregate demand model predicts that an unexpected increase in government spending will have an effect. What will be the short-run effects?a.A decrease in the price level and an increase in real output.b.A decrease in the price level and no effect on real output.c.An increase in the price level and a decrease in real output.d.A decrease in both the price level and real output.e.An increase in both the price level and real output.