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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Fill in the blank spaces (A–BB) in the table that follows.

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To determine

Describe the shift in AD or SRAS curve.

Explanation

Velocity rises:

If velocity increase, then the price level for the goods and services will decrease and the output or real GDP will decrease. Thus, rise in velocity will leads to shift the aggregate demand (AD) curve to leftward.

Expected future income rises:

If the consumer expected future income increases, then the price level for the goods and services will increase and the output or real GDP will increase. Thus, rise in expected future income will leads to shift the aggregate demand (AD) curve to rightward.

Wage rate rises:

If wage rate increases, then the price level for the goods and services will increase and the output or real GDP will decrease. Thus, decrease in wage rate leads to shift the short run aggregate supply (SRAS) curve to leftward.

Business taxes fall:

If business taxes fall, then the businesses become optimistic about future sales and investment will decline, it leads to shift the aggregate demand (AD) curve to rightward...

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