Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. For each event that does shift a curve, use a diagram to illustrate the effect on the economy. a There is a reduction in household income tax. b A cyclone destroys the year’s wheat crop. c Households decide to have less children.
Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. For each event that does shift a curve, use a diagram to illustrate the effect on the economy. a There is a reduction in household income tax. b A cyclone destroys the year’s wheat crop. c Households decide to have less children.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
Problem 2CQ
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Explain whether each of the following events shifts the short-run aggregate-supply curve,
the aggregate-
diagram to illustrate the effect on the economy.
a There is a reduction in household income tax.
b A cyclone destroys the year’s wheat crop.
c Households decide to have less children.
d A significant amount of iron ore is found in Western Australia, capable of supplying
world trade for the next 50 years.
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