The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model. Suppose that AD and ASp represent the initial aggregate demand and aggregate supply in the economy. Figure 18 Refer to Figure 18. Movement of equilibrium from point D to point B could be initiated by: A) a stock market crash that undermines consumer confidence. B) a tax code changes that negatively affect investor expectations. C) a sharp decrease in government spending. D) a higher net exports because of economic expansion in European countries. E) a technological advancement.
The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model. Suppose that AD and ASp represent the initial aggregate demand and aggregate supply in the economy. Figure 18 Refer to Figure 18. Movement of equilibrium from point D to point B could be initiated by: A) a stock market crash that undermines consumer confidence. B) a tax code changes that negatively affect investor expectations. C) a sharp decrease in government spending. D) a higher net exports because of economic expansion in European countries. E) a technological advancement.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The figure given below represents the equilibrium real GDP and price level in the
aggregate demand and aggregate supply model. Suppose that AD and ASp represent
the initial aggregate demand and aggregate supply in the economy.
Figure 18
Refer to Figure 18. Movement of equilibrium from point D to point B could be
initiated by:
A) a stock market crash that undermines consumer confidence.
B) a tax code changes that negatively affect investor expectations.
C) a sharp decrease in government spending.
D) a higher net exports because of economic expansion in European countries.
E) a technological advancement.
Transcribed Image Text:Figure 18.png
AS3
AS,
AS2
B.
AD
AD
AD2
100
200 300
400
500
Real GDP (billions of dollars)
U.S. Price Level
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