Which of the following decreases aggregate demand and shifts the AD curve leftward? O A. a decrease in potential GDP B. an increase in government expenditures on goods and services C. a tax cut D. an interest rate hike E. an increase in quantity of money

Which of the following decreases aggregate demand and shifts the AD curve leftward? O A. a decrease in potential GDP B. an increase in government expenditures on goods and services C. a tax cut D. an interest rate hike E. an increase in quantity of money

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1P

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Question

Which of the following decreases aggregate demand and shifts the AD curve leftward?
O A. a decrease in potential GDP
B. an increase in government expenditures on goods and services
O C. a tax cut
O D. an interest rate hike
O E. an increase in quantity of money

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Illustrate each of the following situations with a graphshowing AS and AD curves, and explain what happensto the equilibrium values of the price level and aggregateoutput:a. A decrease in G with the money supply held constant bythe Fedb. A decrease in the price of oil with no change ingovernment spendingc. An increase in Z with no change in governmentspendingd. An increase in the price of oil and a decrease in G
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