14- Draw a fully labelled diagram to illustrate the changes in aggregate demand curve in the following situations given in part (a) below. a) (i) An increase in investment. (ii) An increase in imports. b) What do you mean by aggregate demand? How is it calculated?

14- Draw a fully labelled diagram to illustrate the changes in aggregate demand curve in the following situations given in part (a) below. a) (i) An increase in investment. (ii) An increase in imports. b) What do you mean by aggregate demand? How is it calculated?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 42CTQ: On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because...

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On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because the product in question is now relatively less expensive than substitute products. Explain why aggregate demand does not increase for the same reason in response to a decrease in the aggregate price level. In other words, what causes total spending to increase if it is not because goods are now cheaper?
Name some economic events not related to government policy that could cause aggregate demand to shift.
Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand diagram. What is the equilibrium output and price level? If aggregate demand shifts right, what is equilibrium output? If aggregate demand shifts left, what is equilibrium output? In this scenario, would you suggest using aggregate demand to alter the level of output or to control any inflationary increases in the price level?
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?
What is on the horizontal axis of the AD/AS diagram? What is on the vertical axis?
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34 Which of the following will shift the aggregate demand curve to the right? a.A new technology is developed that will increase profits. b.Foreign economies fall into recession, reducing their demand for domestic exports. c.The government reduces purchases to balance the budget. d.Income taxes are raised e.Consumers become pessimistic about the future.
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12. 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, draw a diagram to illustrate the effect on the economy. A.) Households decide to save a larger share of their income. B.) Florida orange groves suffer a prolonged period of below-freezing temperatures. C.) Increased job opportunities overseas cause many people to leave the country.
9 What are the determinants for aggregate demand and aggregate supply? How would an ideal aggregate demand and aggregate supply graph look like (describe the relationship/provide a graph/provide a link) and explain how each line would shift due to current economic occurrences. What changes could be made to encourage equilibrium
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