Question

1. Just need the answers please answer in 10 minutes

2. A decrease in the saving rate will not affect which of the following variables in the long-run?

   	a.	The level of investment.
   	b.	Y/N
   	c.	The growth rate of output.
   	d.	K/N

1 points   

QUESTION 2

1. A reduction in the saving rate starting from a steady-state with more capital than the Golden Rule causes investment tom _______ in the transition to the new steady-state.

   	a.	first decrease then increase
   	b.	decrease
   	c.	first increase then decrease
   	d.	increase

1 points   

QUESTION 3

1. In the AS relation, the actual price level depends upon ________.

   	a.	consumer confidence
   	b.	monetary policy
   	c.	fiscal policy
   	d.	expected price level

1 points   

QUESTION 4

1. AD is most likely to shift leftward when there is _______.

   	a.	a fall in the level of interest rates
   	b.	an increase in government expenditure
   	c.	a fall in consumer confidence
   	d.	a fall in wages

1 points   

QUESTION 5

1. Which of the following factors might have shifted the AD curve rightward?

   	a.	A decrease in government purchase
   	b.	Less investment.
   	c.	Higher money wages
   	d.	Reduced income tax.

Answer 1

Question 1

correct option is c. Answer is the growth rate of output. A decrease in the saving rate will not affect the growth rate of output in the long-run. An increase in the saving rate will affect output per worker, capital per worker and the level of investment variables in the long run.

Question 2

correct option is b. Answer is decrease. A reduction in the saving rate starting from a steady-state with more capital than the Golden Rule causes investment tom decrease in the transition to the new steady-state.

Question 3

correct option is d. Answer is expected price level. In the AS relation, the actual price level depends upon expected price level. In the aggregate supply relationship, the actual price level is contingent or relied on expected price level.

Question 4

correct option is c. Aggregate demand is most likely to shift leftward when there is a fall in consumer confidence. An increase or rise in business or consumer confidence shifts the Aggregate demand curve to the right. A reduction or decrease in business or consumer confidence shifts the Aggregate demand curve leftward. The aggregate demand curve inclines or tends to shift to the left when aggregate(total )consumer spending reduces or declines. Consumers might spend less because the cost of living is increasing(rising) or may be because government taxes have increased or risen.

Question 5

correct option is d. Reduced or decreased income tax shifts the Aggregate demand curve to the right. As the rate of income tax rises or increases, then the demand curve shifts leftward. Increased or risen consumer spending on domestic goods and services can shift Aggregate demand to the right.