If the price level increases in the economy, A) The aggregate demand will fall and shift to the left. B) The total spending in the economy will fall. C) The aggregate supply will fall and shift to the left. D) The total spending in the economy will rise
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If the price level increases in the economy,
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- 7) Spending on the war in Afghanistan is essentially categorized as government purchases. How do increases in spending on the war in Afghanistan affect the aggregate demand curve? A) They will move the economy up along a stationary aggregate demand curve. B) They will move the economy down along a stationary aggregate demand curve. C) They will shift the aggregate demand curve to the right. D) They will shift the aggregate demand curve to the left.An increase in the price level causes the aggregate supply curve to shift to another supply schedule. True or FalseSuppose our economy is in macroeconomic equilibrium (also called "general equilibrium") with an upward-sloping aggregate supply curve and a downward-sloping aggregate demand curve. An increase in aggregate demand will: Question 5 options: a) Increase aggregate supply. b) Decrease the price level. c) Causes the aggregate supply to shift to the right. d) Increase real GDP. e) Reduce the number of discouraged workers in the unemployment rate.
- If the price level decreases, what will happen to the level of real GDP supplied? It will usually decrease. It will usually increase. Nothing. It will decrease at first and then increaseIf the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur? A. Aggregate demand will be unchanged. B. Aggregate demand will increase. C. Interest rates will decrease. D. The money supply will decrease.Identify the word, concept, or expression most closely related to the word, concept, or expression below: 1. Short-run effect of an increased number of Canadians vacationing and shopping at home. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product prices rise and output falls, product prices rise and output rises, prices remain unchanged and output rises, product rises and output remains unchanged 2. Short-run effect of increased government spending on infrastructure. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product prices rise and output falls, product prices rise and output rises, prices remain unchanged and output rises, product rises and output remains unchanged 3. Short-run effect of a large increase in commodity (input) prices for businesses. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product…
- Which of the following statements best describes the aggregate supply curve? A) The aggregate supply curve represents the relationship between the price level and the total output or real GDP in the macroeconomy. B) The aggregate supply curve represents the relationship between the inflation rate and the total output or real GDP in the macroeconomy. C) The aggregate supply curve represents the relationship between the inflation rate and the total demand or real GDP in the macroeconomy. D) The aggregate supply curve represents the relationship between the price level and the potential output or GDP in the macroeconomy.To decrease output the government could adopt policies that :Select one a. increase aggregate supply and decrease .aggregate demand b. decrease aggregate supply and .aggregate demand c. decrease aggregate supply and increase .aggregate demand d. increase aggregate supply and aggregate .demandDuring the pandemic of 2020, stimulus checks were sent to qualifying individuals. Some people chose to save their money, rather than spend it. This led to A,B,C, OR D ONE ANSWER a a smaller rightward shift in the aggregate demand (AD) than expected. b a larger rightward shift in the aggregate demand (AD) than expected. c a desire to increase consumption. d a smaller leftward shift in the aggregate demand (AD) than expected.
- In the long run, an increase in government purchases will raise the price level, but not production or employment. True or falseIf the aggregate demand is 300 + 50P and the aggregate supply is 100 + 60P calculate the value of PAs described in the chapter, the Federal Reserve in 2008 faced a decrease in aggregate demand caused by the housing and financial crises and a decrease in short-run aggregate supply caused by rising commodity prices. Starting from a long-run equilibrium, illustrate the effects of these two changes on aggregate supply and aggregate demand on the following graph. Then, on the subsequent graph, indicate what happens on a Phillips-curve diagram. Price Level Inflation Rate LRAS Aggregate Supply LRPC Aggregate Demand Quantity of Output Unemployment Rate SRPC Aggregate Demand Aggregate Supply LRAS Long-run Equilibrium SRPC LRPC + Long-Run Equilibrium