Consider an AS AD diagram.  What would happen in the model if Stock values decreased? Group of answer choices a. AS shifts right and prices decrease while real GDP increases b. AS shifts left and prices increase while real GDP decreases c. AD shifts left and prices decreases while real GDP decreases d. AD shifts right and prices increase while real GDP increases

In each of the following cases, determine whether the IScurve shifts to the right or left, does not shift, or is indeterminate in the direction of shift.a. The real interest rate rises.b. The marginal propensity to consume declines.c. Financial frictions increase.d. Autonomous consumption decreases.e. Both taxes and government spending decrease by thesame amount.f. The sensitivity of net exports to changes in the realinterest rate decreases.g. The government provides tax incentives for researchand development programs for firms

Consider an economy called Xanadu for which desired aggregate consumptiondepends on income, Y. and the real interest rate, r, according toCd =100+0.7Y - 200r.Xanadu's GDP is Y = 1000 and government spending on goods and services is G=180. Xanadu's desired future capital stock is given byK* = 140 - 100ucwhere luCdenotes the user-cost of capital. The price of capital is PK =2, thephysical depreciation rate is d =0.1 and the existing capital stock is K0= 50. Trapital stock between any period t and the following period t+1 evolves accordng toKt+1 = It+(1-d)Kt where It the level of investment. Assume throughout that net factor payments from abroad (NFP) is equal to zero.Suppose instead that Xanadu is a small open economy facing a world interest rate of 1%. It follows that Xanadu's current account position is equal toA) -16B) -51C) -6D) -8

Assume the economy is starting at point B in the graph below. Interest Rate (percent per year) D 4 a. an interest rate cut? E B F Investment demand Investment demand Rate of Investment (billions of dollars per year) Which point demonstrates the effects on investment of 2 1 From point B to (Click to select) b. an interest rate cut accompanied by decreased sales expectations? From point B to (Click to select)