Question

Refer to figure 3. Which of the following could cause a shift from ADO to AD1, ceteris paribus? Select one: O a. An increase in government spending on the environment. O b. An increase in exports. Customize and control Google Chrome O c. A decrease in interest rates. O d. A decrease in consumer confidence. Question 17 Not yet answered Points out of 1.00 P Flag question Suppose you take care of your neighbor's children while she works and you do not charge her. A day care center would charge her $300 per week for this. Your efforts cause the GDP of the economy to: Select one: O a. Increase by $300 per week. O b. Increase, but by less than $300 per week since you are not a licensed day care center O c. Decrease by the opportunity cost of your time since you are not being paid. O d. Remain unchanged since this is a non-market activity.

Answer 1

1.Option B

The aggregate demand curve shifts to the right as the components of aggregate demand, consumption spending, investment spending, government spending, and spending on exports minus imports—rise. As a result with increase in exports AD curve shifts rightward from AD0 to AD1.

2. Option D

Since no money is charged for the services provided fir taking care of children, this will be considered as non market activity and will not be included in GDP. So, this transaction will not affect GDP.