Classify each scenario based on whether it increases or decreases aggregate demand (AD) Increases Aggregate Demand Decreases Aggregate Demand Answer Bank the relative price of foreign goods decreases interest rates fall for businesses only consumers expect income taxes to rise in the future businesses believe that income taxes fall a billion dollars falls from the sky the government buys airplanes consumer demand will fall in the future interest rates decrease
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A: The downward sloping of aggregate demand is shown in the figure below.
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A: Aggregate supply would increase,equilibrium price level and real output would increase.
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Q: aggregate demand
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- Suppose firms become optimistic about futurebusiness conditions and invest heavily in new capitalequipment.a. Draw an aggregate-demand/aggregate-supplydiagram to show the short-run effect of thisoptimism on the economy. Label the new levels ofprices and real output. Explain in words why theaggregate quantity of output supplied changes.b. Now use the diagram from part (a) to show thenew long-run equilibrium of the economy. (Fornow, assume there is no change in the long-runaggregate-supply curve.) Explain in words whythe aggregate quantity of output demanded changesbetween the short run and the long run.c. How might the investment boom affect thelong-run aggregate-supply curve? Explain.1. When the federal government engages in COVID-19 fiscal stimulus such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act this will affect the AD-AS model by: Group of answer choices a. Decreasing aggregate demand (AD). b. Increasing aggregate demand (AD). c. Decreasing aggregate supply (AS). d. Increasing aggregate supply (AS).Explain whether each of the following events shiftsthe short-run aggregate-supply curve, the aggregatedemand curve, both, or neither. For each event thatdoes shift a curve, draw a diagram to illustrate theeffect on the economy.a. Households decide to save a larger share of theirincome.b. Florida orange groves suffer a prolonged period ofbelow-freezing temperatures.c. Increased job opportunities overseas cause manypeople to leave the country.
- TRUE/FALSE The term ‘voodoo economics’ is a term used by the proponents of supply side economics trying to explain to its critics that lower tax rates will result inhigher tax revenue.Please please help me asnswer it correctly and fastly The global oil market has been affected in the recent years by many factors that induces the global price to fall. This consequence is vital for the budget of the oil dependent countries. After the huge decrease on oil price in 2016, many traders and analysts believe that oil markets are still not immune to many problems and the oil price will tend to fall again. The main factor and problems toward a fall of the oil price started in 2015 but considering that people and oil companies do not tend to react immediately to the change of oil price, the total consumption and production of oil did not get any surprised changes in the short- run. The main factor that caused the drop on the oil price is the OPEC failure. The member countries of OPEC did not agree to stabilize the oil markets, since the organization decided against cutting production at a 2014 meeting in Vienna. It is estimated that if OPEC does not cut production, the…Identify three factors that can shift the aggregatedemand curve to the right and three different factorsthat can shift the aggregate demand curve to the left
- an economics recessions in japan will cause the aggregate demand curve inthe US to shift to the right true or falseWhat effects would each of the following have on aggregate demandor aggregate supply, other things equal? In each case explain the expectedeffects on the equilibrium price level and the level of real output, assumingthat the price level is flexible both upward and downward.· A sizable increase in labor productivity (with no change innominal wages).· An increase in exports that exceeds an increase in imports (notdue to tariffs).Explain the concept of excess demand in macroeconomics. Also, explain the role of open market operation in correcting it. (Kinly explain with diagram)
- 10. Which of the following would cause the Aggregate Quantity Demanded to increase? a) An increase in the price level causing an increase in the purchasing power of the consumer's wealth b) A decrease in the price level making domestic prices less expensive relative to foreign prices c) An increase in the price level causing an increase in the market rate of interest d) A decrease in the price level causing a decrease in the purchasing power of the consumers' wealth e) None of the aboveQ.No.1. Differentiate the following by giving at least one practical exampleAggregate demand Vs Aggregate supplyWhat might shift the aggregate-supply curve tothe left? Use the model of aggregate demand andaggregate supply to trace the short-run and long-runeffects of such a shift on output and the price level.