When the economy is out of general equilibrium, which of the three curves (FE, IS, LM) shifts to return the economy to general equilibrium? What causes this curve to shift?

Assuming that there is no government spending or trade, an economy’s GDP is the sum of domestic consumption C and investment I, i.e. Y = C+ I Assume that I is unaffected by GDP Assume the consumption function is C = c0 + c1Y In any equilibrium aggregate demand, AD must be equal to Y, GDP. Given this model, which FIVE of the following statements are correct?   Select one or more: A. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = m(c0 + I), where m = 1/(1 - c1) is the multiplier. B. if c1 = 0.8 the multiplier is equal to 1/0.8= 1.25 C. if c1 = 0.75 the multiplier is equal to 4 D. assume c0 =100, I=50, c1=0.6. The equilibrium value of Y in a demand-driven economy is 300. E. Assume that Y is initially 400, I is initially 100, and the multiplier is 2.5. I increases by 10%. The multiplier implies that in equilibrium Y will increase by 25%. F. The higher is c1 the larger is the multiplier G. If consumers…

If the price level increases, what happens to the consumption function? Why?

LRAS, LRAS₂2 A. B. C. D. E. A B C E D LL AD₁ SRAS₁ W SRAS2 AD2 Real GDP (Y) Based on the figure, which of the following would cause the long-run equilibrium point to change from point B to point D? The population has aged and there are fewer people in the labor force. Firms and workers expected the price level to rise. The economy experienced an increase in government spending. The economy was in an expansion and has adjusted. The country's overall productivity increased.

Find the value of aggregate supply when the consumption expenditure is $2000 and saving are $400

An increase in consumer spending causes the       ["", ""]  curve to shift to the       ["", ""]  .

True/False: Every point on the IS curve represents an equilibrium in the Goods and Service market (i.e. the output market). O True False

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If the supply of petroleum were reduced by petroleum firms due to rising inventories, we can expect what?

Which of the following would increase aggregate demand?   A) Increase in taxation.   B) Increase in savings.   C) Decrease in consumption spending.   D) Increase in government spending.