Answered: What could have caused the aggregate…

What could have caused the aggregate demand curve to shift from AD2 to AD1? Increase in net export Boom in the stock market A decrease in investment Increased level of government spending

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

Refer to the figure above. What could have caused the aggregate demand curve to shift from AD2 to AD1?

Increase in net export
Boom in the stock market
A decrease in investment
Increased level of government spending

PRICE LEVEL
P₁
LRAS
AD₁
Y, Y₂ Y₂
QUANTITY OF OUTPUT
SRAS:
SRAS,
AD₂

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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Similar questions

Using the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then: a-long-run aggregate supply will decrease. b-aggregate demand will decrease. c-aggregate demand will increase. d-long-run aggregate supply will increase.
Q12 Use the graph below to answer the question If South Africa were to discover a plentiful supply of cheap oil, this would: Select one: A. move the AS curve to the right. B. move the AD curve to the right. C. move the AD curve to the left. D. move the AS curve to the left.
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Q9
What are the components of the aggregate demand (AD) curve?
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