Chapter D, Problem 2PA

Some economists argue that the​ "animal spirits" of investors are so important in determining the level of investment in the economy that interest rates do not matter at all. Part 2 a. Suppose that this were truelong dash—that investment in no way depends on interest rates.   Using the line drawing​ tool, show what the investment curve would look like. Label the line​ 'I'.   is my answer correct?

Problem 3 ABC Challenges: Attrition, Balance and Compliance Can television inform people about public affairs? Political scientists Bethany Albertson and Adria Lawrence (2009) conducted an experiment in which they randomly assigned people to treatment and control groups to evaluate the effect of watching TV on a person's information level. Those assigned to the treatment group were told to watch a specific television broadcast and were later asked questions related to what they watched. Those in the control group were not shown the TV broadcast but were asked questions related to the material in the TV broadcast. The dataset contains the following variables: • • • • • • Read News: Dummy variable which =1 if a person reads news and 0 otherwise. Political Interest: interest in political affairs (not interested=1 to very interested=4) Education: years of education Female: female dummy variable (female=1; male=0) Income: family income in thousands of dollars Information Level: information…

The figure to the right gives an​ economy's initial aggregate demand​ (AD) curve.   Using the line drawing​ tool, show an increase in aggregate demand. Properly label this line. Part 2 ​Note: Carefully follow the instructions above and only draw the required object.   Part 3 Which of the following will generate an increase in aggregate​ demand?     A. A decrease in the price level.   B. A decrease in the money supply.   C. Increased government expenditures for war.   D. A tax increase.