Consider the following shocks: A. The government cuts the personal income tax B. Firms expect a recession in the coming years C. A country the US trades with experiences an economic slowdown D. The government cuts unemployment benefits E. The central bank decides to cut the money supply F. US dollar appreciates against other currencies G. The government cuts its spending on infrastructure H. The government of a country the US trades with introduces tariffs on US-produced goods I. There is a stock market crash. For each shock: 1) erplain which component of aggregate erpenditure would the shock affect and why;
Consider the following shocks: A. The government cuts the personal income tax B. Firms expect a recession in the coming years C. A country the US trades with experiences an economic slowdown D. The government cuts unemployment benefits E. The central bank decides to cut the money supply F. US dollar appreciates against other currencies G. The government cuts its spending on infrastructure H. The government of a country the US trades with introduces tariffs on US-produced goods I. There is a stock market crash. For each shock: 1) erplain which component of aggregate erpenditure would the shock affect and why;
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For part A-D
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