11. Complete the following sentence:In terms of the AD-AS model, a decrease in the interest rate leads to a(n)investment spending,a(n)demand and, eventually to a(n)_in the price level.inin aggregatein aggregate spending, a(n)in total production and (or) a(n).(4A Decrease; decrease; decrease; decrease; decreaseB Increase; increase; increase; increase; increaseC Increase; increase; decrease; decrease; decreaseD Decrease; decrease; increase; increase; increase12. A justification for government intervention in the economy arises from the fact that market systems usuallyproduceoutcomes, but they do not necessarily produce_outcomes.(-A Efficient; equitableB Equitable; efficientC Efficient; profitableD Profitable; equitable13. When the govermment uses its overdraft facilities at the central bank, it,in the economy. This is called ,the quantity of moneyfinancing.A Increases; deflationaryB Decreases; inflationaryC Decreases; deflationaryIncreases; inflationary

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11. Complete the following sentence: In terms of the AD-AS model, a decrease in the interest rate leads to a(n), investment spending,a(n). demand and, eventually to a(n). in the price level. in in aggregate in aggregate spending, a(n). in total production and (or) a(n) A Decrease; decrease; decrease; decrease; decrease B Increase; increase; increase; increase; increase C Increase; increase; decrease; decrease; decrease Decrease: decrease: increase: increase: increase

11. Complete the following sentence: In terms of the AD-AS model, a decrease in the interest rate leads to a(n), investment spending,a(n). demand and, eventually to a(n). in the price level. in in aggregate in aggregate spending, a(n). in total production and (or) a(n) A Decrease; decrease; decrease; decrease; decrease B Increase; increase; increase; increase; increase C Increase; increase; decrease; decrease; decrease Decrease: decrease: increase: increase: increase

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter10: Bringing In The Supply Side: Unemployment And Inflation?

Section: Chapter Questions

Problem 3TY

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Similar questions

If foreign wealth-holders decide that the United States is the safest place to invest their savings, what would the effect be on the economy here? Show graphically using the AD/AS model.
If the economy is operating In the Keynesian zone of the SRAS curve and aggregate demand falls, what is likely to happen to real GDP?
In the AD/AS model, what prevents the economy from achieving equilibrium at potential output?
How is pressure for inflationary price increases shown in an AD/AS model?
Explain why the short-run aggregate supply curve might be fairly flat in the Keynesian zone of the SRAS curve. How might we tell if we are In the Keynesian zone of the AS?
How is recession illustrated in an AD/AS model?
What are the economic reasons why the AD curve slopes down?
Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to the right or to the left.
What are some of the ways in which exports and imports can affect the AD/AS model?
Does Says law apply more accurately in the long run or the short run? What about Keynes law?
What is the intermediate zone of the SRAS curve? Will a rise in output be accompanied by a rise or a fall in the price level in this zone?
Would a shift of AD to the right tend to make the equilibrium quantity and price level higher or lower? What about a shift of AD to the left?