Economics (6th Edition)
Economics (6th Edition)
6th Edition
ISBN: 9780134105840
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 24, Problem 24.2.6PA
To determine

The impact of downward shift in the AS curve due to price fall on AD.

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Consider a macro-economy that was initially at equilibrium. Using an aggregate demand and aggregate supply diagram model of the economy, graphically illustrate and discuss the short-run and long-run effectsof the following events upon the economy:(a) The imposition of a carbon tax upon local big polluting companies;(b) An appreciation in the foreign exchange rate value of the economy’s currency;(c) A major trading partner’s economy fall into recession;(d) The country’s main exports fall in price while the goods the country imports from abroad rise in price
State whether each of the following transactions is a part of aggregate demand in the United States, and whether it is C, I, G, X, or IM.   a. David buys a keyboard synthesizer made in the United States b. A Japanese automaker buys stock in an American auto company c. A Japanese automaker builds an assembly plant in Illinois d. Will buys a compact disc player made in Japan e. Dieter, a German resident, buys frozen chickens that were raised       in the United States f. The U.S. government sends an insurance check to Renee, an           unemployed keypunch operator.
Which of the following both shift the aggregate demand curve to the right?               Group of answer choices net exports rise for some reason other than a price change and the money supply rises. net exports fall for some reason other than a price change and the money supply rises. net exports rise for some reason other than a price change and the price level rises. net exports fall for some reason other than a price change and the price level rises.
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