22. Which of the following would cause the AD curve to shift to the right? O The government raises income taxes. Workers build expectations of higher inflation into their contracts. Firms become pessimistic about the O future growth of GDP, sales, and profits. O The Fed shifts to a more spending.

22. Which of the following would cause the AD curve to shift to the right? O The government raises income taxes. Workers build expectations of higher inflation into their contracts. Firms become pessimistic about the O future growth of GDP, sales, and profits. O The Fed shifts to a more spending.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

increase.
22. Which of the following would cause
the AD curve to shift to the right? *
O The government raises income taxes.
Workers build expectations of higher
inflation into their contracts.
Firms become pessimistic about the
future growth of GDP, sales, and
profits.
O The Fed shifts to a more spending.
23. Which of the following is not one of
the five regions of the aggregate

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2. Give examples of factors that decrease short-run aggregate supply. Which way does the SAS curve shift?
4. Define the concepts of aggregate supply and aggregate demand in detail. Describe the effects of policy variables and implications on the movement and shapes of the AD and AS curves.
Recall the Aggregate Demand and Aggregate Supply model, in the short-run, a reduction in businesses' costs of production make output rise and prices fall. O output fall and prices rise. O output and prices fall. output and prices rise.
(Figure: Short- and Long-Run Equilibrlum I) Use Figure: Short- and Long-Run Equlibrium . If the economy le short-run maroeconomio wqbrum tE. appropriate polkcy to retum the economy to potential output would be atn): LRAS price l SRAS AD Real GDP potential output Oa decrease in taxes. Ob increase in government spending. Oc increase in transfer payments. Od. decrease in government spending.
Which of the following will cause an increase in aggregate demand? OA. An increase in the reserve requirement. Tax rate increase. O B. Oc The purchase of bonds by the Fed. OD. Government spending cut.
Figure 16-6 Price level 104 100 LRAS, LRAS₂ SRAS, SRAS₂ AD₂ Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at 0 $10 11 11.3 Real GDP point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely O increase the money supply and decrease the interest rate. O increase taxes. ● increase government spending. O increase oil prices. Oraise interest rates.
explain the likely effects of U.S boom on the demand for canadian exports.what woukd be the effect of canadian aggregate demand?suppose the bank of canada viewed its monetary policy as being appropriate for keeping gdp of canada close to potential gdp . what would you hen predict to be the central bank's response to foriegn boom in U.S
The observed correlation between the price level and real GDP may be low because O consumption is procyclical. O the central bank acts to target the price level. O money demand increases when the nominal interest rate rises. O money demand does not depend on income.
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5. Suppose that people’s preference for consumption fell. How would this change the aggregate demand: Increase, Decrease or No change at any given price: Decrease or Increase? How would this shift the AD curve: Leftward, Rightward, or No shift? Change in AD: Shift of AD:
The AS curve shifts to the left when O All listed options are correct. the cost of production rises the government does expansionary fiscal policy O net exports rises O we lower interest rates
PRICE LEVEL O a. C to D. Ob. D to C. Oc.B to A Od. A to B. D LRAS O B AD QUANTITY OF OUTPUT SRAS, SRAS AD Refer to Figure 34-2. If the economy is in long-run equilibrium, then an adverse shift in short-run aggregate supply would move the economy from