ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD₁ to
AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where
previously it was $300 billion.
Note: Review the graph and then fill in the table that follows.
PRICE LEVEL
170
160
150
140
130
120
110
100
90
0
100
300, 140
AD₁
AD2
200
600
300 400 500
REAL GDP (Billions of dollars)
700
800
expand button
Transcribed Image Text:The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD₁ to AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. Note: Review the graph and then fill in the table that follows. PRICE LEVEL 170 160 150 140 130 120 110 100 90 0 100 300, 140 AD₁ AD2 200 600 300 400 500 REAL GDP (Billions of dollars) 700 800
90
0
Wealth
The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to
decrease aggregate demand.
Determinant
+
100 200 300 400 500 600 700 800
REAL GDP (Billions of dollars)
Government Purchases
Expected Rate of Return on Investment
Incomes in Other Countries
Change Needed to Decrease Aggregate Demand
choices are
increase or
decrease
expand button
Transcribed Image Text:90 0 Wealth The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand. Determinant + 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Government Purchases Expected Rate of Return on Investment Incomes in Other Countries Change Needed to Decrease Aggregate Demand choices are increase or decrease
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