A decline in U.S. wealth would tend to cause: a. long-run aggregate supply to increase. b. short-run aggregate supply to increase. c. aggregate demand to decrease. d. long-run aggregate supply to decrease. e. aggregate demand to increase.
Answer
Option c
c. aggregate demand to decrease
A decrease in wealth decreases consumption and investment spending which decreases aggregate demand. It decreases the price level and real GDP.
A long run supply curve changes if there is a change in capital, labor resources or technological change.
A short run supply curve changes if there is a change in the supply side, as the input prices change etc.
A decline in U.S. wealth would tend to cause: a. long-run aggregate supply to increase. b....
1) The long-run aggregate supply curve shifts to the right when there is A) a decrease in the total amount of capital in the economy. B) a decrease in the total amount of labor supplied in the economy. C) a decrease in the available technology. D) a decline in the natural rate of unemployment. 2) The short-run aggregate supply curve shifts to the right when A) output gap is higher. B) output gap is lower. C) expected inflation is higher....
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11. Using aggregate demand, short-run aggregate sup- ply, and long-run aggregate supply curves, explain the process by which each of the following economic - TEMO alderen events will move the economy from one l. macroeconomic equilibrium to another mu with diagrams. In each case, what are the and long-run effects on the aggregate price lev aggregate output? m one long-run other. Illustrate are the short-run te price level and a. There is a decrease in households' wealth due to decline...
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