A decrease in aggregate demand will cause: OPTIONS: aggregate supply to fall according to classical economists, and prices to fall according to Keynes. prices to fall and unemployment to increase according to both classical economists and Keynes. aggregate supply to fall according to Keynes, and unemployment to increase according to classical economists. prices to fall according to classical economists, and unemployment to increase according to Keynes.

Q: Which of the following scenarios would result in a decrease in Aggregate Demand? A) The congress…

A: Aggregate Demand is the sum of consumption expenditure, government spending, investment spending and…

Q: Other things equal, as consumers increase their savings to pay off their debts will    Multiple…

A: In the intricate web of macroeconomic dynamics, the relationship between consumer behavior and the…

Q: Keynes recommended that high unemployment should be remedied with     a reduction in the money…

A: According to Keynesian macroeconomics, price and wages are inflexible. Any change in the market…

Q: You are hired by the Council of Economic Advisors (CEA) as an economic consultant. The chairperson…

A: Unemployment refer to the situation when individuals is in working force and willing to work but due…

Q: Price stability is most likely to be achieved during times of: rising aggregate demand. high…

A: Price stability is the condition in which domestic currency get back its value or we can say that…

Q: Which of the following statements best represents the relationship between Keynesian and…

A: According to Keynesian perspective, polices of fiscal and monetary is used in short run to balance…

Q: You will draw four separate Aggregate-Demand/Aggregate-Supply graphs.  Each graph will have one…

A: An AD-AS graph is a macroeconomic model that shows the relationship between aggregate demand (AD)…

Q: The balanced budget multiplier changes according to the values of the marginal propensity to consume…

A: Marginal propensity to consume (MPC) measures the change in consumption due to a change in income.…

Q: Select the answer that best describes Keynesian and Classical economic theories.     Classical…

A: Answer: The classical theory explains that the economy moves between equilibria without government…

Q: the aggregate supply curve   a. shows the level of real GDP produced in the economy at different…

A: The aggregate supply curve shows the total quantity of output (real GDP) that firms are willing and…

Q: Which of the following best differentiates the Keynesian View from the Classical View?        The…

A: The Keynesian economics is the economic theory that develops when the recession occurs and it states…

Q: Increased government spending on interstate highways, public housing projects, and defense projects…

A: Government spending is spending by the public sectors on goods and services such as education,…

Q: If the economy is experiencing unemployment, the most appropriate government action to shift the…

A: Unemployment refers to a situation where the workers are ready to offer their labor at the existing…

Q: An economist who claims that an increase in government spending would result mainly in a higher…

A: An increase in government spending would result mainly in a higher price level.

Q: AS, AS2 AD 2 AD1 Output y Figure 9.2 Quld he sOUC n cimu ot from no Price level P

A: AS denotes the total supply of ‘goods and services’ supplied at different prices, at a specific time…

Q: Compare and contrast the ideas of Keynes and the policies based on his ideas with the ideas and…

A: The Keynes and Supply side economics are two distinct  economic theories. Both stress upon different…

Q: Which of the following is true regarding the aggregate demand-aggregate supply model given the…

A: 1. Aggregate demand would increase: In the aggregate demand-aggregate supply (AD-AS) model,…

Q: Which of the following describes the use of Keynesian macroeconomic policy to resolve an…

A: Inflationary gap is the difference between actual real GDP and potential real GDP.

Q: a)Which of the following shifts aggregate demand to the right? Group of answer choices Congress…

A: Aggregate demand (AD) is the total demand for goods and services in an economy at a given price…

Q: A principle difference between the new Classical and the new Keynesian models has to do with the…

A: New classical theory is based on models on perfectly competitive consumers, producers and labor…

Q: An increase in aggregate demand when the economy is operating at near full capacity is likely to…

A: In an economy, full capacity level of output is also known as potential Output level that can be…

Q: If an economy is at full employment and Aggregate Demand decreases suddenly, this will cause which…

A: Aggregate demand is the total demand of goods and services demanded by people in the economy.…

Q: Price Level a 0 ASLR2 ASLR1 Q₂ Q₁ Real Domestic Output AD₁ AD₂ Refer to the diagram. A decline of…

A: The correct option is: real-business-cycle view of Contraction.

Q: An increase in demand in total demand in the Keynesian range of an aggregate supply curve will cause…

A: The equilibrium price level and output in an economy are determined by the aggregate demand and…

Q: Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of…

A: *Answer:

Q: According to Keynes’ Law... A) The total demand for products determine the level of gross domestic…

A: According to Keynes’ Law.. The correct option is: option (A) The total demand for products determine…

Q: Which of the following would be most likely to produce a leftward shift of the aggregate demand (AD)…

A: Aggregate demand curve(AD)  is the aggregation of demand of all the goods and services in an…

Q: Which of the following is implied by a rightward shift in the economy's AS curve? There is a demand…

A: Aggregate supply (AS): - It is the total supply of goods and services in an economy at a particular…

Q: n due to the poor economy, government officials have decided to cut taxes. They are considering two…

A: Tax cuts are considered to be reductions to the amount of money of taxpayers which in turn goes…

Q: Suppose that the government decreases spending more than is necessary to close an inflationary gap.…

A: In the realm of macroeconomics, government spending plays a pivotal role in influencing an economy's…

Q: If the intersection of AD and SRAS occurs at $21 trillion GDP but full employment GDP (LRAS) is at…

A: b) All of the choices would help increase AD and bring the economy closer to full employment

Q: Analyse Australia's economy in 2023 using the Mundell Fleming model and derive and draw the…

A: An economic framework called the Mundell-Fleming model examines how monetary policy, capital flows,…