A rise in the money supply will raise both the equilibrium national income and the equilibrium price level if the aggregate supply curve has a positive slope A) True B) False
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- Assume the Country C’s economy is in recession: Country C implements a combination of expansionary fiscal and monetary policy. In the absence of complete crowding out what will be the effect on Aggregate demand, price level and interest rates in country C.The aggregate demand curve for an economy slopes downward because a decrease in the price level will: A.increase the demand for money. B.put an upward pressure on interest rates. C.increase the purchasing power of money. D.make domestically produced goods more expensive relative to foreign goods.One reason the aggregate demand curve is downward sloping is that a lower price level Group of answer choices decreases the real value of wealth. causes our currency to appreciate. decreases the interest rate. leads to lowers wages.
- An increase in the money supply will cause which of the following to occur? OPTIONS: a rightward shift of the aggregate supply curve a leftward shift of the aggregate demand curve a leftward shift of the aggregate supply curve a rightward shift of the aggregate demand curveAggregate demand shifts right if at a given price level a. taxes rise and shifts left if the money supply increases. b. taxes rise and shifts right if the money supply increases. c. taxes fall and shifts left if the money supply increases. d. taxes fall and shifts right if the money supply increases.When disposable income increases, consumption expenditure decreases by the same amount. does not change. also increases, and by an equal amount. also increases, but by less. also increases, and by more. Demand-pull inflation starts with a decrease in aggregate supply. a decrease in aggregate demand. an increase in aggregate demand. an increase in aggregate supply. an increase in potential GDP.
- Assume that the economy is in equilibrium when aggregate demand curves shifts to the right. What happens to the economy in the short-run? the GDP gap becomes positive. Allowed to self-correct, the economy will experience higher inflation. the GDP gap becomes negative. Allowed to self-correct, the economy will experience higher inflation. the GDP gap does not change, but the inflation rate will rise. there is not enough information to answer the question.Which of the following increases Aggregate Demand? a. Decrease in Money Supply b. Increase in Interest Rates c. Increase in the Money Supply d. Stronger US DollarThe aggregate supply shifts to the right if: A. supplies of resources increase. B. investment increases. C. wage rates increase. D. consumption increases.
- An increase in the money supply will: OPTIONS: decrease aggregate demand. increase aggregate demand. increase aggregate supply. decrease aggregate supply.Determine whether the events below will cause the aggregate demand curve to shift to the left or to the right. Assume the price level remains constant. a. Government purchases increase by $2 billion. Aggregate demand shifts (Click to select) to the right to the left . b. Real interest rates increase. Aggregate demand shifts (Click to select) to the right to the left . c. Taxes increase. Aggregate demand shifts (Click to select) to the left to the right . d. Aggregate consumption decreases as consumer confidence falls. Aggregate demand shifts (Click to select) to the right to the left .Following the equation: Y = C + I + G + NX will the below examples increase or decrease the aggregate demand in Pakistan? What will be the shift in position for below situations? Widespread fear of recession (1 Mark) The appreciation in the Pakistani Rupee rate (1 Mark) A boom in the stock market (1 Mark) An increase in transfer payment (1 Mark) A decrease in real interest rate in Pakistan (1 Mark)