3. Briefly explain why the following would cause the Aggregate Demand curve to shift to the right(an increase), or to the left(a decrease): expectations that the economy will perform very well in the near future

Q: List three factors that can change economy’s potential output. What is the impact of shifts of the…

A: The three factors that can change economy’s potential output 1. Expansion in innovation and hence…

Q: 7. Determinants of short-run aggregate supply The following graph shows a decrease in short-run…

A: The total supply of goods and services that firms in a national economy intend to sell over a…

Q: 12. Explain whether each of the following events shifts the short-run aggregate-supply curve, the…

A: (a)   Savings of the household is the excess disposable income with them remaining after the…

Q: Suppose an economy attains its long-run equilibrium at last year. However, after the start of the…

A: (a) If aggregate demand is high, this shifts AD curve rightward, increasing both price level and…

Q: 2. In the following table, determine how each event affects the position of the aggregate demand…

A: Aggregate demand refers to the total quantity of goods and services demanded by consumers at a given…

Q: 14. In the accompanying diagram, the economy is in long- run macroeconomic equilibrium at point E…

A:

Q: Discuss one reason for the downward sloping aggregate demand curve.

A: Demand curve in simple words we can say that it depicts the relationship between the price of the…

Q: 4. The country of Merryville has an unemployment rate that is greater than the natural rate of…

A: In an economy equilibrium level of real GDP and price level are determined by the aggregate demand…

Q: 2. Please use a graph to produce aggregate supply in classical model under the assumption of nominal…

A: Before the Great Depression, the Classical Model was popular. It claims that the economy is very…

Q: e Page 426 13.1. What is the aggregate demand-aggregate supply model? Fill in the blanks to complete…

A: Recessions in the United States have a long history in the United States, demonstrating that they…

Q: 8. Explain whether each of the following events will increase, decrease, or have no effect on…

A: (a)   The wave immigration experienced by the US will result in an increase of the labour force. The…

Q: 14- Draw a fully labelled diagram to illustrate the changes in aggregate demand curve in the…

A: Aggregate demand is downward sloping curve which shows inverse relationship between price and real…

Q: 8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the…

A: The aggregate demand (AD) shows the negative relation between the quantity demand and price level.…

Q: Discuss one (1) reason for the downward sloping aggregate demand curve.

A: There is three main reasons for the downward sloping curve of the aggregate demand curve. The wealth…

Q: 6. From March 2009 to 2013, the U.S. stock market more than doubled in value. How might this have…

A: A doubling in the value of stock market also raises the value of money invested in the stock market.…

Q: 2. The 1974-1975 recession clearly illustrates how a supply shock affect the economy. Following the…

A: AD : Aggregate Demand Curve SRAS1 : Short Run Aggregate Supply Curve in the year 1974 LRAS1 : Long…

Q: Suppose that an economy that is initially in equilibrium sees an increase in investment spending.…

A: Equilibrium in the market of goods and services occurs at the intersection of aggregate demand and…

Q: 1. Briefly explain why the following would cause the Aggregate Demand curve to shift to the right(an…

A: The aggregate demand is the summation of all the individual demand curves in the economy. There will…

Q: 8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the…

A:

Q: A) List and explain in detail, the components of Aggregate Demand and explain each of their…

A: The aggregate demand is the summation of all the demands for the goods and services in the economy.…

Q: If both aggregate supply and aggregate demand simultaneously increase,   a. the price level and…

A: The increase in AS shifts AS to the right which  increases real GDP and decreases price level.

Q: 4. Briefly explain why each of the following would cause the Aggregate Demand curve to shift to the…

A: I.The aggregate demand is the summation of all the individual demand curves in the economy. There…

Q: Illustrate each of the following situations with a graph showing aggregate supply and aggregate…

A: Case 1: Increase in government spending while money supply held by the Fed is constant. The constant…

Q: Use two diagrams to explain the effects of the determinants of aggregate demand on real GDP in a…

A: Aggregate demand is the sum of consumption, investment, government spending and net export. Any…

Q: What are the major components of aggregate demand? How these components impact the Aggregate Demand?…

A: The total demand for finished products and services in an economy is referred to as aggregate…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: Given; Quantity supplied=Natural level of output+α×Price levelActual-Price levelExpected where;…

Q: 8. Illustrate each of the following situations with a graph showing aggregate supply and aggregate…

A: a) Increase in government spending while money supply held by the Fed is constant. The constant…

Q: 2. Briefly explain why the following would cause the Aggregate Demand curve to shift to the right(an…

A: Aggregate demand   = C + I + G + (X-M), C= consumption, I= Investment, G= Government spending, (X-M)…

Q: What effects would each of the following have on aggregate demand or       aggregate supply?…

A: Aggregate demand is the total value of goods and services produced in an economy during a period of…

Q: If aggregate supply is vertical, what role does aggregate demand play in determining output ? In…

A: Aggregate demand and aggregate supply model shows how is total demand and total supply determined…

Q: Reading the following paragraph has a multiplier occurred and how is this shown on the aggregate…

A: In economics, a multiplier is a term that describes an economic factor. When increased or changed,…

Q: 2. In the following table, determine how each event affects the position of the aggregate demand…

A: Aggregate demand refers to the total revenue or income expected by the producer or sellers after…

Q: (Changes in Aggregate Supply) List three factors that can change the economy’s potential output.…

A: A market is a place where the buyers and the sellers interact with each other and the exchange of…

Q: During the 2020 campaign, Joe Biden proposed raising income taxes on those earning more than…

A: The equilibrium is set up where the aggregate demand and aggregate supply are equal. Change in the…

Q: 51) Which of the following both shift aggregate-demand curve to the right? an increase in taxes and…

A: A decrease in taxes and at a given price level consumers feel more wealthy will shift the AD curve…

Q: Refer to the following graph to answer the next five questions. Price lavel (P) LRAS SRAS2 SRAS, AD…

A: If the economy is currently at point B, then in the long run, we can expect we will move to point C…

Q: 4.2 List and discuss two (2) reasons for the downward sloping shape of the aggregate demand curve.

A: Please find the answer below.   DOWNWARD SLOPING DEMAND CURVE: The downward sloping of the curve…

Q: 3. Explain how each of the following will affect aggregate demand. In each case, draw a diagram to…

A: The LM curve shows the direct relationship between interest rate and quantity. The LM curve shows…

Q: On the following graph, use the purple line (diamond symbol) to plot this economy's long-run…

A: Price Level SRAS 100 60+2(100-110) =40 105 60+2(105-110) =50 110 60+2(110-110) =60 115…

Q: What are the factors other than price that can shift aggregate demand curve in terms of investment…

A: Consumption spending and investment spending are part of aggregate demand.

Q: 3. Explain how each of the following will affect aggregate demand. In each case, draw a diagram to…

A: c) Increase corporate taxes means less money the investors and also he will pay less to the workers…