(a)
To explain:
The effect on aggregate
Answer to Problem 1P
When the export increases, the aggregate demand also increases.
Explanation of Solution
When the exports increases, it represents the increase in demand forgoods in the foreign market. Therefore, the increased demand leads to an increase in aggregate demand.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the
(b)
To explain:
The effect on aggregate demand, if both import and export decreases provided other thingsbeing equal.
Answer to Problem 1P
The effect will be intermediate on the aggregate demand, if both the exports and imports decreases.
Explanation of Solution
The aggregate demand increases with an increase in export while it decreases with the increase in import.In this case,both of them are decreasing.Thus, the change will depend upon the export or import whichever is more intense.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
(c)
To explain:
The effect on aggregate demand, if consumption decreases provided other thingsbeing equal.
Answer to Problem 1P
The aggregate demand will increase with an increase in consumption.
Explanation of Solution
The aggregate demand will raise with the increase in consumption of goods and services. More will be the consumption of products, more will be the demand.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
(d)
To explain:
The effect on aggregate demand, if investment increases provided other things being equal.
Answer to Problem 1P
The increase in investment will increase the aggregate demand.
Explanation of Solution
The aggregate demand will increase with the increase in investment in capital goods. Investment made in new technology, building new infrastructure, purchasing new machines would lead to an increase in the income of the people.Thus, the
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
(e)
To explain:
The effect on aggregate demand, if investment decreases and government purchase increase provided other thingsbeing equal.
Answer to Problem 1P
If the investment decreases and the government purchase increases, the effect on aggregate demand will be intermediate.
Explanation of Solution
The decrease in investment leads to fall in demand, whereas, the increase in government purchases lead to increase in demand.The change in aggregate demand will depend upon the intensity, accordingly the aggregate demand will shift towards left or right.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
(f)
To explain:
The effect on aggregate demand, if the price increases provided other thingsbeing equal.
Answer to Problem 1P
If the price level increases, there will be a decrease in the aggregate demand.
Explanation of Solution
The increase intheprice level will decrease the purchasing power of the consumers. This will lead to fall in the value of currency, decreasing the aggregate demand.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
(g)
To explain:
The effect on aggregate demand, if the price level decreases provided other thingsbeing equal.
Answer to Problem 1P
The aggregate demand will increase with a decrease in the price level.
Explanation of Solution
The decrease in the price level increases the purchasing power of the consumers.Thus, it will increase the demand forgoods and services.
Aggregate demand:
It represents the total goods and services that are demanded at a given point of time. As the price level and gross domestic product demand share an inverse relationship, the demand curve slopes downwards when the price becomes high.
Want to see more full solutions like this?
Chapter 22 Solutions
EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
- Please help and Solve! (Note: this is a practice problem)arrow_forwardPlease help and thanks! (Note: This is a practice problem!)arrow_forwardUnit VI Assignment Instructions: This assignment has two parts. Answer the questions using the charts. Part 1: Firm 1 High Price Low Price High Price 8,8 0,10 Firm 2 Low Price 10,0 3,3 Question: For the above game, identify the Nash Equilibrium. Does Firm 1 have a dominant strategy? If so, what is it? Does Firm 2 have a dominant strategy? If so, what is it? Your response:arrow_forward
- not use ai please don't kdjdkdkfjnxncjcarrow_forwardAsk one question at a time. Keep questions specific and include all details. Need more help? Subject matter experts with PhDs and Masters are standing by 24/7 to answer your question.**arrow_forward1b. (5 pts) Under the 1990 Farm Bill and given the initial situation of a target price and marketing loan, indicate where the market price (MP), quantity supplied (QS) and demanded (QD), government stocks (GS), and Deficiency Payments (DP) and Marketing Loan Gains (MLG), if any, would be on the graph below. If applicable, indicate the price floor (PF) on the graph. TP $ NLR So Do Q/yrarrow_forward
- Now, let us assume that Brie has altruistic preferences. Her utility function is now given by: 1 UB (xA, YA, TB,YB) = (1/2) (2x+2y) + (2x+2y) What would her utility be at the endowment now? (Round off your answer to the nearest whole number.) 110arrow_forwardProblema 4 (20 puntos): Supongamos que tenemos un ingreso de $120 y enfrentamos los precios P₁ =6 y P₂ =4. Nuestra función de utilidad es: U(x1, x2) = x0.4x0.6 a) Planteen el problema de optimización y obtengan las condiciones de primer orden. b) Encuentren el consumo óptimo de x1 y x2. c) ¿Cómo cambiará nuestra elección óptima si el ingreso aumenta a $180?arrow_forwardPlease draw the graph for number 4 and 5, I appreciate it!!arrow_forward
- not use ai pleasearrow_forwardnot use ai pleasearrow_forward• Prismatic Cards: A prismatic card will be a card that counts as having every suit. We will denote, e.g., a prismatic Queen card by Q*. With this notation, 2.3045 Q would be a double flush since every card is a diamond and a heart. • Wild Cards: A wild card counts as having every suit and every denomination. Denote wild cards with a W; if there are multiple, we will denote them W₁, W2, etc. With this notation, W2 20.30054 would be both a three-of-a-kind (three 2's) and a flush (5 diamonds). If we add multiple wild cards to the deck, they count as distinct cards, so that (e.g.) the following two hands count as "different hands" when counting: W15 5Q and W255◊♡♡♣♣ In addition, 1. Let's start with the unmodified double-suited deck. (a) Call a hand a flush house if it is a flush and a full house, i.e. if all cards share a suit and there are 3 cards of one denomination and two of another. For example, 550. house. How many different flush house hands are there? 2. Suppose we add one wild…arrow_forward
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning