Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 10, Problem 5CQ
To determine
Identify the difference between an anticipated and unanticipated increase in aggregate
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Why does the effect of a given increase in aggregate demand have a larger effect on real output in the short run, the more excess capacity exists in the economy?
What is Aggregate Demand (AD)? Investigate three (3) causes that can shift the AD curve to the right.
What are three factors that help explain the slope of the aggregate demand curve? What is the most important factor? Why?
Chapter 10 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- How did the decline in U.S. home prices in 2006–2008 affect aggregate demand?arrow_forwardComplete the table by indicating the change in each determinant necessary to decrease aggregate demand. Change Needed to Decrease AD Wealth Taxes Expected rate of return on investment Incomes in other countriesarrow_forwardGive three reasons why the aggregate demand curve slopes downward.arrow_forward
- Which of the following are likely to increase investment and as a result, aggregate demand? A) falling real interest rates B) rising real interest rates C) increased business taxesarrow_forwardSummarizes various factors that causes change in aggregate demandarrow_forwardAre the determinants of aggregate demand the same things that apply to demand for an individual good?arrow_forward
- Which of the following would shift the aggregate demand curve to the right? An increase in input prices An increase in taxes An increase in interest rates A decrease in interest rates by the FED.arrow_forwardIf the economy’s labor force is increasing and also becoming more productive, what will happen to the aggregate supply curve?arrow_forwardare my answers correct?arrow_forward
- Which combination of factors would most likely increase aggregate demand? Pick your answer from below and explain your answer choice using aggregate demand and aggregate supply. An increase in household indebtedness and a decrease in net exports. An increase in consumer wealth and a decrease in interest rates. An increase in net exports and a decrease in government spending. An increase in business taxes and a decrease in profit expectations.arrow_forwardWhich of the following could explain why a country’s aggregate demand curve might shift inwards to the left? a) a decrease in interest rate. b) an appreciation of its currency. c) a rise in government expenditure. d) an increase in business confidence.arrow_forward
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