Which of the following shifts aggregate demand to the left?
Which of the following shifts aggregate demand to the left?
a. Interest rates fall.
b. Stock prices fall for some reason other than a change in the price level.
c. The dollar depreciates for some reason other than a change in the price level.
d. The price level rises.
Which of the following shifts aggregate demand right?
a. both a decrease in the price level and the implementation of an investment tax credit
b. a decrease in the price level but not the implementation of an investment tax credit
c. the implementation of an investment tax credit but not a decrease in the price level
d. neither a decrease in the price level nor the implementation of an investment tax credit
During the Great Recession, the decline in housing prices along with the decline in stock market values
a. lowered wealth and consumption and shifted the aggregate demand curve to the left
b. lowered wealth and consumption and shifted the aggregate demand curve to the right
c. increased wealth and consumption and shifted the aggregate supply curve up/left
d. lowered wealth and consumption and shifted the aggregate supply curve up/left
If the marginal propensity to consume (MPC) is equal to .8, then if income increases by $200 billion we would expect
a. consumption to increase by $80 billion
b. consumption to increase by $160 billion
c. consumption to increase by $200 billion
d. consumption to increase by $20 billion
Homework Answers
1.Fall in stock price reduces wealth and shifts AD to left.
Answer-B
2.AD does not shift as a result of change in price level.Implementation of investment tax credit can shift AD to left.
Answer-C
3.Decline in housing prices reduces consumption,decline in stock price reduces wealth.Both these factors reduces aggregate demand.
Answer-A
4.MPC=Change in consumption/change in income
Change in consumption=.8*200=160
Consumption increases by 160 billion.
Answer-B
QUESTION 23 Which of the following shifts aggregate demand to the left? a. The price level...
QUESTION 23 Which of the following shifts aggregate demand to the left? a. The price level falls. b. The dollar depreciates for some reason other than a change in the price level. c. Stock prices fall for some reason other than a change in the price level. d. The price level rises. QUESTION 24 Aggregate demand shifts left when the government a. decreases taxes. b. cuts military expenditures. c. creates a new investment tax credit d. None of the above...
the government cuts tases or inereases government spending 20) ) the aggregate demand curve shifts to...
the government cuts tases or inereases government spending 20) ) the aggregate demand curve shifts to the right. tne long-run aggregate supply curve shifts to the left. C) the 20) When aggregate demand curve shifts to the left. the short-run aggregate supply curve shifts to the left. t spending without an accompanying increase 21) An increase in govenment spending n taxes demand A) does not increase aggregate B) would effectively eliminate an inflationary gap. Q mquires additional govemment borrowing spending...
True or False: Indicate whether the following questions are true or false and then EXPLAIN why. 1. An increase in price expectations shifts the long-run aggregate supply curve to the left. 2. All expl...
True or False: Indicate whether the following questions are true or false and then EXPLAIN why. 1. An increase in price expectations shifts the long-run aggregate supply curve to the left. 2. All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the price level that was expected. 3. One reason the Aggregate Demand curve slopes downward is the real wealth effect: a decrease...
The following graph shows a decrease in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1 to AD2, causing the quantity of output demanded to fall at all price levels
4. Determinants of aggregate demand The following graph shows a decrease in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1 to AD2, causing the quantity of output demanded to fall at all price levels For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to decrease...
26. are The four components of planned aggregate expenditures a. Consumption, investment, inventories, and government purchases....
26. are The four components of planned aggregate expenditures a. Consumption, investment, inventories, and government purchases. b. Consumption, planned investment, unplanned changes in inventory, and exports. c. Consumption, investment, government purchases, and net exports. d. Consumption, investment, exports and imports. 27. The aggregate demand (AD) curve slopes downward indicating that a. an increase in the general price level will reduce the aggregate quantity of goods and services demanded. b. an increase in the general price level will increase the aggregate...
During the Great Recession, U.S. household wealth declined, leading to a decrease in aggregate demand. Which...
During the Great Recession, U.S. household wealth declined,
leading to a decrease in aggregate demand. Which pair of factors
contributed to this decline in wealth?
Choose one
:A. a financial market crisis and an increase in gas prices
B. an increase in tax rates and a decrease in stock prices
C. a decrease in stock prices and a decrease in housing
prices
D. a decrease in housing prices and a decline in the level of
technology
E. a decrease in...
19. What happens to prices and output when the long-run aggregate-supply curve shifts left? a....
19. What happens to prices and output when the long-run aggregate-supply curve shifts left? a. Prices and output both increase. b. Prices and output both decrease. c. Prices increase and output decreases. d. Prices decrease and output increases. 20. What would cause prices and real GDP to rise in the short run? a. an increase in the expected price level b. an increase in the money supply ...
During a recessions caused by an aggregate demand shock, we would expect inflation to __________ and unemployment to _...
During a recessions caused by an aggregate demand shock, we would expect inflation to __________ and unemployment to ____________. a. fall, fall b. rise, rise c. fall, rise d. rise, fall During the Great Depression there was no deposit insurance and banking panics occurred. A bank panic happens when a. banks fear that loans will be too risky and sharply cut back lending b. many depositors lose confidence and fear that loan defaults will endanger their deposits c. banks fear...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0 and the government removed import quotas, what would happen to the exchange rate? a. It would appreciate to E1. b. It would appreciate to E2. c. It would depreciate to E1. d. It would depreciate to E2. ____ 10. When a country experiences capital flight, which of the following best explains the effects? a. The interest rate falls because the demand for loanable funds shifts left....
1. . (Figure: Determining SRAS Shifts) If there are advances in technology, the short-run aggregate supply...
1.
.
(Figure: Determining SRAS Shifts) If there are advances in
technology, the short-run aggregate supply curve will shift from
SRAS0 to _____ and the price level will shift to
_____.
SRAS1; P0
SRAS2; P2
SRAS2; P1
SRAS1; P1
2.
Simultaneous recession and deflation can be explained by:
a decrease in aggregate supply.
an increase in aggregate supply.
a decrease in aggregate demand.
an increase in aggregate demand.
3.
Which is a determinant of aggregate supply?
household expectations
prices of...
the government cuts tases or inereases government spending 20) ) the aggregate demand curve shifts to the right. tne long-run aggregate supply curve shifts to the left. C) the 20) When aggregate demand curve shifts to the left. the short-run aggregate supply curve shifts to the left. t spending without an accompanying increase 21) An increase in govenment spending n taxes demand A) does not increase aggregate B) would effectively eliminate an inflationary gap. Q mquires additional govemment borrowing spending...
26. are The four components of planned aggregate expenditures a. Consumption, investment, inventories, and government purchases. b. Consumption, planned investment, unplanned changes in inventory, and exports. c. Consumption, investment, government purchases, and net exports. d. Consumption, investment, exports and imports. 27. The aggregate demand (AD) curve slopes downward indicating that a. an increase in the general price level will reduce the aggregate quantity of goods and services demanded. b. an increase in the general price level will increase the aggregate...
During the Great Recession, U.S. household wealth declined,
leading to a decrease in aggregate demand. Which pair of factors
contributed to this decline in wealth?
Choose one
:A. a financial market crisis and an increase in gas prices
B. an increase in tax rates and a decrease in stock prices
C. a decrease in stock prices and a decrease in housing
prices
D. a decrease in housing prices and a decline in the level of
technology
E. a decrease in...
1.
.
(Figure: Determining SRAS Shifts) If there are advances in
technology, the short-run aggregate supply curve will shift from
SRAS0 to _____ and the price level will shift to
_____.
SRAS1; P0
SRAS2; P2
SRAS2; P1
SRAS1; P1
2.
Simultaneous recession and deflation can be explained by:
a decrease in aggregate supply.
an increase in aggregate supply.
a decrease in aggregate demand.
an increase in aggregate demand.
3.
Which is a determinant of aggregate supply?
household expectations
prices of...
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