Homework Answers
With the increase in the tax, the disposable income of the people decrease, so they will consume less and save less compare to without change in the tax.
Therefore consumption spending decrease and investment also decrease. Since consumption and investment are part of AD, therefore AD will decrease and so the AD curve shifts leftward from AD1 to AD3.
Hence option b is the correct answer.
Add Answer to:
QUESTION 39 Figure 34-8 AD AD AD. Refer to Figure 34-8. An increase in taxes will...
Figure: AD–AS Refer to Figure: AD–AS. Assume that the economy is in long-run equilibrium. If the...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
LAS Real GDP LAS Price level Real GDP 39. Refer to the figure above to answer...
LAS Real GDP LAS Price level Real GDP 39. Refer to the figure above to answer this question. According to neoclassicists, which of the following is true? A) The horizontal axes of both graphs A and B show nominal GDP. It is not possible for an economy to be at Y2 in graph B. C) The shift from AD3 to AD4 is caused by an increase in the price level Graph A illustrates that changes in aggregate demand have no...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
Use the following figures to answer the next question.
Question 2 Use the following figures to answer the next question. A decline in aggregate expenditures from AEZ to AE, resulting from the real-balances, interest-rate, and foreign purchases effects would be depicted as a movement from A to C along aggregate demand curve AD1. movement from C to A along aggregate demand curve AD1.shift of aggregate demand from AD1 to AD3shift of aggregate demand from AD2 to AD1.Question 4 Use the following graph to answer the next question. If AD, shifts to AD2, the full multiplier...
Refer to Figure: Shift of the Aggregate Demand Curve. A movement from AD1 to AD2 may have been the result of:
2. Figure: Shift of the Aggregate Demand Curve Refer to Figure: Shift of the Aggregate Demand Curve. A movement from AD1 to AD2 may have been the result of: increases in personal income taxes. a decrease in government spending. a decrease in consumer wealth. an increase in government spending.
Figure 15-2 %) LRAS SRAS 5 6 7 8 9 *(%) Refer to the Figure 15-2....
Figure 15-2 %) LRAS SRAS 5 6 7 8 9 *(%) Refer to the Figure 15-2. In a closed economy, what would cause the aggregate demand curve to shift from AD to AD*? 1 a. a decrease in stock prices b. an increase in government purchases O can increase in the price level 10 d. an increase in consumer and firm optimism about the future
Refer to the Figure. An increase in demand is represented by a A. movement downward...
Refer to the Figure. An increase in demand is represented by a A. movement downward and to the right along Demand A B. movement upward and to the left along Demand C C. shift from Demand A to Demand B D. shift from Demand C to Demand B
3,4,5 please! QUESTION 3 An increase in planned real investment spending causes O a shift of...
3,4,5 please!
QUESTION 3 An increase in planned real investment spending causes O a shift of the C+I+ G+X curve and a movement along the aggregate demand curve. O a shift of the C + I+ G +X curve that causes the aggregate demand curve to shift. O a shift of the C+1+ G+X curve but has no effect on the aggregate demand curve. a movement along the C + I+ G+X curve and a shift of the aggregate demand...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
The following figure depicts the aggregate demand (AD), theshort-run aggregate supply (SRAS), and the long-run...
The following figure depicts the aggregate demand (AD), the
short-run aggregate supply (SRAS), and the long-run aggregate
supply (LRAS) curves for an economy. The economy is initially at
long-run equilibrium, at point A. Suppose that there is an increase
in the amount of investment in the economy due to a reduction in
the real interest rate. This increase in investment shifts the AD
curve to the right, depicted below in the movement of the economy
from point A to point...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
LAS Real GDP LAS Price level Real GDP 39. Refer to the figure above to answer this question. According to neoclassicists, which of the following is true? A) The horizontal axes of both graphs A and B show nominal GDP. It is not possible for an economy to be at Y2 in graph B. C) The shift from AD3 to AD4 is caused by an increase in the price level Graph A illustrates that changes in aggregate demand have no...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
Figure 15-2 %) LRAS SRAS 5 6 7 8 9 *(%) Refer to the Figure 15-2. In a closed economy, what would cause the aggregate demand curve to shift from AD to AD*? 1 a. a decrease in stock prices b. an increase in government purchases O can increase in the price level 10 d. an increase in consumer and firm optimism about the future
3,4,5 please!
QUESTION 3 An increase in planned real investment spending causes O a shift of the C+I+ G+X curve and a movement along the aggregate demand curve. O a shift of the C + I+ G +X curve that causes the aggregate demand curve to shift. O a shift of the C+1+ G+X curve but has no effect on the aggregate demand curve. a movement along the C + I+ G+X curve and a shift of the aggregate demand...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
The following figure depicts the aggregate demand (AD), the
short-run aggregate supply (SRAS), and the long-run aggregate
supply (LRAS) curves for an economy. The economy is initially at
long-run equilibrium, at point A. Suppose that there is an increase
in the amount of investment in the economy due to a reduction in
the real interest rate. This increase in investment shifts the AD
curve to the right, depicted below in the movement of the economy
from point A to point...
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