The following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD₁ to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 90 0 100 200 300 400 500 OUTPUT (Billions of dollars) AD 9 600 700 800 The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant neces: Consumer expectations about future profitability Government spending to increase aggregate demand. Change Needed to Increase AD Interest rates The value of the domestic currency relative to the foreign currency
The following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD₁ to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 90 0 100 200 300 400 500 OUTPUT (Billions of dollars) AD 9 600 700 800 The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant neces: Consumer expectations about future profitability Government spending to increase aggregate demand. Change Needed to Increase AD Interest rates The value of the domestic currency relative to the foreign currency
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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