economic forecasters had expected consumer spending to increase by 6 percent this year, but instead it increases by only 1 percent, this situation would be an example of a Group of answer choices negative demand shock positive demand shock negative supply shock positive supply shock
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positive demand shock
negative supply shock
positive supply shock
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- In March 2020, as the Covid-19 recession hit the world, consumers became pessimistic about their future incomes. How did this increased pessimism affect the aggregate demand curve in the year 2020? Group of answer choices This will shift the aggregate demand curve to the right. This will move the economy down along a stationary aggregate demand curve. This will move the economy up along a stationary aggregate demand curve. This will shift the aggregate demand curve to the left.In our Aggregate Demand and Supply model, a decrease in Aggregate Demand would cause which of the following in the short run? Group of answer choices a) neither deflation nor inflation b) deflation and recession c) inflation and economic growth d) inflation and recession e) deflation and economic growthWhat kind of change would happen to aggregate demand, aggregate supply, and real GDP. if foreign countries purchase an unusually large number of U. S. manufactured passenger and military airplanes.
- Evaluate the following statements using relevant diagrams and provide detailed explanations. The statements describe events that might shift aggregate demand (AD), aggregate supply (AS), both or neither. Clearly label your diagrams. A recent economic report suggests that consumer confidence has increased Apple Inc. has announced a 50% discount on its new generation iPad devices for university students After a prolonged acceleration in economic activity, the government raises the rate of personal income tax. A continuing economic expansion has drawn in many working age people (and their families)from neighbouring countries in search of jobs and better livesThe graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Price Level Fiscal Policy 160 150 140 130 120 110 100 90 80 70 60 50 40 80 160 240 320 400 480 560 640 720 800 LRAS Real GDP (billions of dollars) AS AD₁ ADWhich of the following scenarios would result in a decrease in Aggregate Demand? A) The congress passes a new income tax cut. B) A rise in imports from Europe C) A decline in investors confidence causes investment to fall. D) Technology improvements lead to productivity gains
- If the economy experiences inflation and economic growth, this means that aggregate demand grows by more than aggregate supply. True or FalseIn a time of crisis where there is a pandemic, policymakers try to encourage economic activity by stimulating aggregate demand as quickly as possible. discuss 2 strategies policymakers in a country could use to stimulate aggregate demand.Aggregate supply grows over time because of growing consumer and government spending. True or False
- Real Estate Boom is an example of Group of answer choices Negative supply shock Positive Supply shock Negative Demand Shock Positive Demand shockClassify the events according to their impact on aggregate demand (AD). A dramatic decline in the average price of houses will Increased concern that a recession is looming will An announcement by the central bank to maintain its existing monetary policy will A reduction in government spending will A dramatic improvement in the stock market, causing investors wealth to rise, will A recession occurring in a trading partner's economy will An increase in income tax rates on individuals earning more than $450,000 per year willAs you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD. Any event that causes a change in production costs or increases productivity will shift aggregate supply (AS). Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give the direction in which the graph shifts. Demand Situation Aggregate Supply Aggregate Demand Supply Sales of Atlanta Braves gear grows with the success of the team. 1. The President and Congress pass a trillion dollar stimulus bill to provide aid during recession. 2. 3. Salmonella outbreak in peanut processing plants threatens lunches for school children. 4. Pomegranates are shown to be cancer fighting superfoods. Value of U.S. dollars declines, exports increase. 5. Global oil prices…
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