Which of the following might cause the AD curve to shift to the right? an increase in government spending bullishness on the part fo investors an increase in the
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Which of the following might cause the AD curve to shift to the right?
an increase in government spending |
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bullishness on the part fo investors |
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an increase in the money supply |
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all of the above |
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Solved in 2 steps
- Why the AD CURVE has a negative slopeWhich of the following could shift the DAD (dynamic AD) curve to the right, all else equal? an increase in imports a higher real interest rate the Fed raising its target inflation rate a decrease in home purchasesIf taxes are increased, the AD curve Select one: a. shifts rightward and aggregate demand decreases. b. shifts leftward and aggregate demand decreases. c. does not shift but there is a movement down along the curve. d. is not affected because a change in taxes is a nominal change not real change.
- We can shift the AD curve to the right by lowering taxes having the Fed buy bonds from banks lowering interest rates doing expansionary fiscal policy All listed options are correct.Suppose that in 2005, nominal wages decrease in Torania. Show how this event will change equilibrium output and price level by shifting either the SRAS or AD curve.Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from FOMC Meeting Minutes Press Release February 6, 1981 “Shortly after the November 18 meeting, incoming data indicated that the monetary aggregates were growing considerably faster than the rates consistent with the Committee’s objectives for the September-to-December period… These developments were associated with additional upward pressures on the federal funds rate and other short-term interest rates; in the first statement week after the meeting, the funds rate was at about or somewhat above the upper limit of the range of 13 to 17 percent specified by the Committee, compared with an average of 14 ½ percent in mid-November. In a telephone…
- List 3 distinct events that can increase the AD curve. List 3 distinct events that can increase the AS curve.Read the following excerpt. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from Public Law 110-85 of the 110th Congress: Signed into law by President George W. Bush February 13, 2008 “To provide economic stimulus through recovery rebates to individuals, incentives for business investment, and an increase in conforming and FHA loan limits. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. Title I – Recovery Rebates and Incentives for Business Investment … Sec. 101. 2008 recovery rebates for individuals. Sec. 102. Temporary increase in limitations on expensing of certain depreciable business assets Sec. 103. Special allowance for certain property acquired during 2008.”…Read the following excerpt. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from Public Law 110-85 of the 110th Congress: Signed into law by President George W. Bush February 13, 2008 “To provide economic stimulus through recovery rebates to individuals, incentives for business investment, and an increase in conforming and FHA loan limits. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. Title I – Recovery Rebates and Incentives for Business Investment … Sec. 101. 2008 recovery rebates for individuals. Sec. 102. Temporary increase in limitations on expensing of certain depreciable business assets Sec. 103. Special allowance for certain property acquired during 2008.”…
- Suppose that in 2011, Quarterville’s government cuts taxes. Show how this event will change equilibrium output and price level by shifting either the SRAS or AD curve.Suppose the Thai economy is currently in a long-run (and thereby short run) equilibrium. Then, the Bank of Thailand (BOT) suddenly increases the money supply. (a) Describe the initial impact of this event in the AD-AS model by explaining whether and how any curve(s) shifts and to which direction. (b) How do the price level and the real GDP of Thailand change in the short run?A leftward shift in the AD curve might be caused by which of the following? falling price expectations the interest rate effect a reduction in the money supply falling wage costs