6 Business Fluctuations: End of Chapter ProblemLet's have some practice with the aggregate demand curve. If you want to draw it in your familiar y = b + mx format, you canthink of it this way:inflation (growth in money + growth in velocity)-real growtha. What is being held constant on a fixed aggregate demand curve?O spending growth (growth in M + growth in u)O real GDP growth (growth in Y)inflation (growth in P)b. What has to change to make an aggregate demand curve shift?O inflation (growth in P)spending growth (growth in Morowth in :)b. What has to change to make an aggregate demand curve shift?inflation (growth in P)O spending growth (growth in M + growth in v)O real GDP growth (growth in Y)c. Identify each statement that must be false according to the quantity theory.Last year, spending grew at 10%, real growth was 5%, and inflation was -5%.Last year, spending grew at 100%, real growth was 0%, and inflation was 20%.Last year, spending grew at 5%, real growth was 5%, and inflation was 2%.Last year, spending grew at 4%, real growth was -2%, and inflation was 6%.Last year, spending grew at 10%, real growth was 4%, and inflation was 6%.

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Let's have some practice with the aggregate demand curve. If you want to draw it in your familiar y = b + mx format, you can think of it this way:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Business Fluctuations: End of Chapter Problem
Let's have some practice with the aggregate demand curve. If you want to draw it in your familiar y = b + mx format, you can
think of it this way:
inflation (growth in money + growth in velocity)-real growth
a. What is being held constant on a fixed aggregate demand curve?
O spending growth (growth in M + growth in u)
O real GDP growth (growth in Y)
inflation (growth in P)
b. What has to change to make an aggregate demand curve shift?
O inflation (growth in P)
spending growth (growth in Morowth in :)
b. What has to change to make an aggregate demand curve shift?
inflation (growth in P)
O spending growth (growth in M + growth in v)
O real GDP growth (growth in Y)
c. Identify each statement that must be false according to the quantity theory.
Last year, spending grew at 10%, real growth was 5%, and inflation was -5%.
Last year, spending grew at 100%, real growth was 0%, and inflation was 20%.
Last year, spending grew at 5%, real growth was 5%, and inflation was 2%.
Last year, spending grew at 4%, real growth was -2%, and inflation was 6%.
Last year, spending grew at 10%, real growth was 4%, and inflation was 6%.

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