The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand. Determinant Wealth Government Purchases Expected Rate of Return on Investment Incomes in Other Countries Change Needed to Decrease Aggregate Demand choices are increase or decrease
The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand. Determinant Wealth Government Purchases Expected Rate of Return on Investment Incomes in Other Countries Change Needed to Decrease Aggregate Demand choices are increase or decrease
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD₁ to
AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where
previously it was $300 billion.
Note: Review the graph and then fill in the table that follows.
PRICE LEVEL
170
160
150
140
130
120
110
100
90
0
100
300, 140
AD₁
AD2
200
600
300 400 500
REAL GDP (Billions of dollars)
700
800

Transcribed Image Text:90
0
Wealth
The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to
decrease aggregate demand.
Determinant
+
100 200 300 400 500 600 700 800
REAL GDP (Billions of dollars)
Government Purchases
Expected Rate of Return on Investment
Incomes in Other Countries
Change Needed to Decrease Aggregate Demand
choices are
increase or
decrease
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