In 2013, Prussia's aggregate demand curve was determined by the equation M + = 8% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation M + = 5% Using this information, draw Prussia's old and new dynamic aggregate demand (AD) curves on the graph. Inflation rate 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 -4 -3 -2 -1 Show Trans AD 2013 0 Real GDP growth rate AD 2014 1 2 3 4 5 6 7 8 9 10 decreased consumer confidence an improvement in technology increase in real wages Answer Bank riots and political instability increased government spending an increase in imports Which of the three factors could have resulted in the change in aggregate demand seen between 2013 and 2014? Assume that this is a typical economy that uses inputs, such as coal and oil. Answer Bank an increase in exports decreased investor confidence oil price increase

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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In 2013, Prussia's aggregate demand curve was determined by the equation M += 8%
A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation
M + V = 5%
Using this information, draw Prussia's old and new dynamic aggregate demand (AD) curves on the graph.
Inflation rate
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
-4 -3 -2 -1
Show Tran
AD 2013
AD 2014
0 1 2 3 4 5 6 7
Real GDP growth rate
8 9 10
decreased consumer confidence
increase in real wages
an improvement in technology
Answer Bank
an increase in imports
increased government spending
riots and political instability
Which of the three factors could have resulted in the change
in aggregate demand seen between 2013 and 2014?
Assume that this is a typical economy that uses inputs, such
as coal and oil.
Answer Bank
an increase in exports
decreased investor confidence
oil price increase
Transcribed Image Text:In 2013, Prussia's aggregate demand curve was determined by the equation M += 8% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation M + V = 5% Using this information, draw Prussia's old and new dynamic aggregate demand (AD) curves on the graph. Inflation rate 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 -4 -3 -2 -1 Show Tran AD 2013 AD 2014 0 1 2 3 4 5 6 7 Real GDP growth rate 8 9 10 decreased consumer confidence increase in real wages an improvement in technology Answer Bank an increase in imports increased government spending riots and political instability Which of the three factors could have resulted in the change in aggregate demand seen between 2013 and 2014? Assume that this is a typical economy that uses inputs, such as coal and oil. Answer Bank an increase in exports decreased investor confidence oil price increase
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