Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed does nothing, what might Congress do to stabilize aggregate demand?

Q: Look at the photo for prompt Question: Since you took Mr. Inzer’s Honors Economics course, you…

A: Given:Real output = $15 trillionUnemployment rate = 10%If there is full employment, National income…

Q: One of the three main tools of the Federal Reserve is fiscal policy.  True  False

A: Central Bank: The central bank is the apex bank of the country that supplies the money or maintains…

Q: The government has the ability to influence the level of output in the short run using monetary and…

A: The following are arguments in favor of active stabilization policy by the government:a)The Fed can…

Q: Some people have argued that the high inflation of the late 1970s was a consequence of the fact that…

A: The Federal Reserve:It has the responsibility to manage the activities of commercial and financial…

Q: A severe negative supply shock occurs when there is a significant reduction in the supply of key…

A: Supply is the number of goods and services the supplier is willing and able to sell at the market.…

Q: The federal government tends to increase their spending to get the economy out of recession. Explain…

A: Recession refers to the situation of slowdown in economic activities. During the recession, the…

Q: Starting from long run equilibrium,  use the basic aggregate demand and aggregate supply diagram to…

A: Aggregate demand shows the total expenditure done in the economy. Aggregate supply curve shows the…

Q: What are the leading, lagging, and coincident indicators at the Conference Board (such as consumer…

A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…

Q: What happens when aggregate demand decreases?

A: Aggregate demand refers to all of the consumers' combined demand for all goods and services in the…

Q: If the economy is experiencing unemployment, the most appropriate government action to shift the…

A: Unemployment refers to a situation where the workers are ready to offer their labor at the existing…

Q: The government possesses the tools necessary to influence the output level in the short run through…

A: Since macroeconomic analysis influences the economy's resilience and long-term growth, it will…

Q: The Federal Reserve determines that the equilibrium level of output is above full employment and the…

A: Federal reserve is the central bank who regulates the supply of money in the economy.

Q: Suppose that survey measures of consumer confidence indicates a wave of pressimism is sweeping the…

A: There is no optimisim.There is wave of pessimisim that is sweeping the country,with low consumer…

Q: A worldwide drought has reduced food production. Inflation has increased, unemployment has risen…

A: Inflation is the increase in general price level of all goods and services in the economy.

Q: Which of the following does not cause the aggregate demand curve to shift to the right? A) A…

A: the aggregate demand is the sum of the total demand for goods and services in the economy in a…

Q: Which of the following statements about the debate over stabilization policy are correct? Check all…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following will cause a decrease in aggregate demand? A) Increase in government…

A: Income taxes affect the consumption component of aggregate demand. a rise in income taxes reduces…

Q: Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of…

A: To increase aggregate demand, expansionary fiscal policy is implemented using following tools: (1)…

Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…

A: During pandemic situation , alomost every nation have been affected by the covid-19 and the…

Q: Explain why the Aggregate demand curve is downward sloping. There are two reasons given in the text.…

A: Aggregate Demand(AD) can be defined as the sum total demand of all the individuals in the economy.…

Q: assume there is a huge pandemic and the US Gov’t requires lockdowns that close many businesses and…

A: Aggregate demand is the sum of consumption , investment , government spending and net export.  =>…

Q: 1. Define the poverty rate. Does it rise or fall during recessions? a.Since the official poverty…

A: Poverty is a economic situation where a person is not able to fulfill his basic livelihood…

Q: While the economy is at potential output, the government increases spending. The following table…

A: 1. **Initial Conditions**: Before the increase in government spending, the economy is at potential…

Q: What Factors Affect Aggregate Demand in our current economy?

A: Aggregate demand refers to the total demand for goods and services in the economy by all the…

Q: How will a change in the money supply affect aggregate demand?

A: Aggregate demand (AD) shows the relationship between total spending and the price level. Total…

Q: Year I Year 6 Year 9 Government Spending 591 852 1500 Subsidies 61 75 100 Indirect Taxes 84 98 102…

A: The Net National Product (NNP) can be calculated using the Expenditure method. Here Gross Domestic…

Q: What happens when aggregate demand Increases? give examples in paragraphs

A: Aggregate demand is the summation of individual demand made in the economy for a given time.…

Q: Can you explain policy lags briefly and compare fiscal and monetarypolicies with respect to inside…

A: A policy lag implies the lag between the time when economic problem arises and the effect of the…

Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…

A: The use of government spending and tax strategies to impact economic conditions, particularly…

Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…

A: The aggregate demand plays the critical role in maintaining the full employments level. The rise in…

Q: the factors that can increase short-run aggregate supply?

A: Aggregate supply- It is the total supply of goods and services by an economy.Short-run aggregate…

Q: Suppose that government spending is increased at the same time when an autonomous monetary policy…

A: The aggregate supply is the total amount of services and commodities that firms in an economic plan…

Q: Question: A recent article (federalreserve.gov/econres/feds/files/2020049pap.pdf) published by the…

A: Macroeconomics examines the working, composition, and dynamics of an economy. AD/AS model is used…

Q: What does a positive output gap indicate about the economy? The economy has slack, and the Central…

A: Gross Domestic Product refers to the sum of all the values of the goods and services that the people…

Q: Read the following quote and explain in complete sentences whether it discusses fiscal policy,…

A: Fiscal Policy is the policy measure through which government manages the spending and taxation for…

Q: *Does monetary or fiscal policy have a longer time lag?  Why?

A: Monetary policy is defined as the policy adopted by the central bank of the country to influence the…

Q: Assume that in response to a pandemic, Congress is considers allocating funds to states to build…

A: Congress uses fiscal policy to affect real GDP in the the economy. It refers to changes in…

Q: Explain why aggregate demand curve is downward sloping? b. What is the difference between monetary…

A: a. The aggregate demand curve is defined as the graphical representation of the total quantity of…

Q: 8. Using policy to stabilize the economy The government has the ability to influence the level of…

A: Stabilization policies are framed by the government for the management of economic fluctuations.