Figure 2. PRICE LEVEL 70 к AD₂ QUANTITY OF OUTPUT 9 AD, AD₂ Refer to Figure 2. An increase in taxes will a. shift aggregate demand from AD₁ to AD3. b. shift aggregate demand from AD to AD2. C. cause movement from point C to point D along AD₁. d. have no effect on aggregate demand.
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- Determine whether each of the following would cause a shift in the aggregate demand curve , A shift in the aggregate supply curve, neither, or both. Which curve shifts and which direction? What happens to the aggregate output and the price levels in each case? A the price level changes. Be consumer confidence to clients. See the supply resources increase. D wage rate increases.Assume 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: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagramRefer to Figure 34-5. An increase in taxes will a. shift aggregate demand from AD1 to AD3. O b. cause movement from point A to point B along AD1. c. have no effect on aggregate demand. O d. shift aggregate demand from AD1 to AD2. PRICE LEVEL Figure 34-5 기 11 AD 3 QUANTITY OF OUTPUT AD₁ AD₂
- 2. How does each of the following affect the aggregate demand curve? a. Government spending increases. b. The amount of taxes collected decreases.Assume 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 rateDuring recessions, taxes tend to a. rise and thereby increase aggregate demand. b. fall and thereby decrease aggregate demand. c. fall and thereby increase aggregate demand. d. rise and thereby decrease aggregate demand.
- Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?R T 3. Price level B K SAS 1 SASO Real output C. an increase in aggregate demand. D. a decrease in aggregate demand. IUO Refer to the graph shown. A movement from A to C is most likely to be caused by: A. an increase in input prices. B. a decrease in input prices. NGQuestion 28 Macroeconomists would suggest that an economy experiencing high unemployment should adopt policies to O reduce aggregate demand. O increase aggregate demand. O increase aggregate supply. O reduce aggregate supply.
- If the price level rises and the money wage rate remains constant, what happens to the quantity of real GDP supplied? How does the economy move? If the price level rises and the money wage rate remains constant, the quantity of real GDP supplied _______ and there is a movement up along the _______. A. increases; aggregate supply curve B. increases; potential GDP line C. does not change; aggregate supply curve D. does not change; potential GDP lineIf the price level rises and the money wage rate remains constant, what happens to the quantity of real GDP supplied? How does the economy move? If the price level rises and the money wage rate remains constant, the quantity of real GDP supplied _______ and there is a movement up along the _______. A. increases; aggregate supply curve B. increases; potential GDP line C. does not change; aggregate supply curve D. does not change; potential GDP line Thanks!!If the government announces a decrease in spending with an increase in taxes, which of the following would most likely occur? a. a leftward shift of the aggregate demand curve b. a rightward shift of the aggregate demand curve c. an upward movement along the aggregate demand curve d. a downward movement along the aggregate demand curve e. no change in the aggregate demand curve as well as no movement along it