Which of the following will NOT shift the AD curve? Oa. O a. Changes in consumer confidence O b. Changes in autonomous exports O c. Changes in government expenditure O d. Changes in the inflation rate ?
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- Many financial analysts and economists eagerly await the press releases for the reports on the home price index and consumer confidence index. What would be the effects of a negative report on both of these? What about a positive report?Does Says law apply more accurately in the long run or the short run? What about Keynes law?In the AD/AS model, what prevents the economy from achieving equilibrium at potential output?
- The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?What are some of the ways in which exports and imports can affect the AD/AS model?Assume the economy has positively sloped AS curve. A leftward shift of the AD curve will result in O A. a decrease in prices and no change in real GDP.OB. an increase in both real GDP and prices.O C.a decrease in both real GDP and pricesO D.an increase in prices and no change in real GDPO E.an increase in real GDP and no change in prices.OF. a decrease in real GDP and no change in prices.
- Keynes notes that when looking at aggregate demand (AD), there are two factors that can cause shifts in import and export demand. Which of the following would be such a factor? A,B,C, OR D ONE ASNWER A Changes in populations B Changes in relative growth rates between countries C Changes in the discount rate D Changes in savings behaviorSuppose an economy's macro equilibrium is such that a shift in either AD or AS (or both) to the right is desired. From this we can conclude that the economy may be experiencing O wartime production O economic growth O excess demand O unemploymentDiscuss what is meant by a recessionary gap and an inflationary gap in the AD/AS model. Give examples of what will change consumption, investment, government purchases, and net exports, and thus AD. (12.1)
- For each situation below, analyse whether it shifts the aggregate demand (AD) curve, the aggregate-supply (AS) curve, both, or neither. Then, if it does shift a curve, construct the AD-AS diagram to show the effect on the economy in the long-run. a) One extraordinary impact of COVID-19 pandemic to the U.S. economy is a massive increase in saving. U.S. recorded nearly tripled saving over the first two quarters of 2020, from $1.59 trillion annualized in the first quarter to $4.69 trillion in the second, which is by far the biggest increase in modern history. b) The prolonged monsoon rain has caused the production of vegetables in Cameron Highlands fell by about 30%. It has severely impacted a lot of crops, including fruits and flowers. Besides, labor shortages due to the pandemic makes the matters worse.Suppose concerns about the size of the federal budget deficit lead theU.S.Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?Describe reasons why the SRAS and/or LRAS may shift left or shift right. Holding AD constant, how would these actions tend to change the equilibrium price level and real GDP produced? (11.3)