Answered: A leftward shift in the AD curve might…

A leftward shift in the AD curve might be caused by which of the following? falling price expectations the interest rate effect a reduction in the money supply falling wage costs

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 3WNG

See similar textbooks

Similar questions

The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table 24.3 shows. a. Identify the (i) equilibrium basing from the AD/AS diagram attached. b. Would you expect unemployment in this economy to be relatively high or low? c. Would you expect concern about inflation in this economy to be relatively high or low? d. Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Identify the new aggregate equilibrium. e. How will the shift in AD affect the original output, price level, and employment?
From the list below, match the letter of the outcome each of the following events produces upon the AD curve. Type in a single letter (A, B, C or D). Deflation has occurred during the past year. Real GDP levels of all the nation's major trading partners have declined. There has been a decline in the foreign exchange value of the nation's currency. The price level has increased this year. ☐☐☐☐ A Shifts to right B Shifts to left C Movement up along D Movement down along
Using an AD/AS diagram (starting from long-run/full employment equilibrium), graphically show and verbally describe how each of the following events would affect the U.S. economy's equilibrium real GDP and price level. a. Discovery and implementation of new technology b. Mexico's economic growth increases faster than ours c. There is a general increase in the price of raw materials e. The cost of labor (wages) rises g. The price of oil is expected to fall d. The number of workers in the labor force decreases due to pandemic retirements/death f. A new Congress decreases government spending h. Consumer confidence falls
Which of the following could shift the DAD (dynamic AD) curve to the right, all else equal? an increase in imports a higher real interest rate the Fed raising its target inflation rate a decrease in home purchases
Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?
Draw the AD/AS graph for the situation being described Explain one monetary policy action to correct the economy back to the natural rate Explain one fiscal policy action to correct the economy back to the natural rate Draw how the policy will impact the AD/AS model from part 1. 4. There has been a huge run in the prices of commodities especially oil in the past years. This run in prices has occurred with more and more people losing their jobs. The unemployment rate stands at 12% with inflation matching it at 14%. The people are now feeling the Misery Index of 26%. How will the government help them?
In the AD/AS model, if both inflationary expectations and business taxes increase, then the price level ___ and actual real GDP ___ and employment ___.
The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both economic growth and inflation are dynamic phenomena. Suppose economic growth is 3% per year and aggregate demand is growing at the same rate. What does the AD/AS model say the inflation rate should be?
Which of the following would NOT cause a shift in AD? Select one: a. A reduction in interest rates b. A fall in the cost of production c. A reduction in income tax d. An increase in government spending
The imaginary country of Jasa Island has the aggregate supply and aggregate demand curves given in the table below. Price level Aggregate demand Aggregate supply 100 700 200 120 600 325 140 500 500 160 400 570 180 300 620 REQUIREMENTS: Plot an AD/AS diagram from the data above. Identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, so AD…
Q9
An increase in the expected price level shifts the short-run aggregate supply curve to the right and an increase in the actual price level shifts SRAS to the left right and an increase in the actual price level does not shift the SRAS left, and an increase in the actual price level shifts SRAS to the right left and an increase in the actual price level shifts SRAS to the left