Which of the following might cause the AD curve to shift to the right? an increase in government spending bullishness on the part fo investors an increase in the
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Which of the following might cause the AD curve to shift to the right?
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an increase in government spending |
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bullishness on the part fo investors |
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an increase in the money supply |
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all of the above |
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- Explain what is meant by aggregate demand. Then how to derive the AD curve and why the AD curve has a negative slope. Explain using a graph how the effect of an increase in money supply on the AD curve. In the same way, also explain the effect of an increase in government purchase on the AD curve.х, х* A v P v Av Normal No Spacing Heading 1 Heading 2 Styles Pane U v ab Dicta Reading the following paragraph has a multiplier occurred and how is this shown on the aggregate demand model or IS curve model? New Delhi has also devised a complex scheme to permit central government employees, public sector bank staff, and staff of state-owned enterprises to use money allocated for home leave and other holiday travel to instead purchase consumer goods. Aggregate demand model for India's economy IS curve model for India Y = AD Interest rate Aggregate demand (AD) $billions AD = C + I + G + ( X -M) Where C=a +b (1-t)Y R IS 45° Y1 Output(Y) $Billions Output (Y) $billions O Focus 目 English (United Kingdom)Why the AD CURVE has a negative slope
- Three ways to increase Consumption which would cause a shift right in the AD curve would be or orWhy does the aggregate demand curve slope downward and what causes the AD curve to shift?What is an impact of a temporary money expansion on the aggregate demand (AD) curve? The AD curve shifts upward. The AD curve shifts downward. The AD curve does not shift and the equilibrium point moves upward along the AD curve. The AD curve does not shift and the equilibrium point moves downward along the AD curve
- increase. 22. Which of the following would cause the AD curve to shift to the right? * O The government raises income taxes. Workers build expectations of higher inflation into their contracts. Firms become pessimistic about the future growth of GDP, sales, and profits. O The Fed shifts to a more spending. 23. Which of the following is not one of the five regions of the aggregate18. If more American tourists visit South Africa. The of dollars increases and the dollar in the rand/dollar exchange rate A Supply; depreciates Demand; depreciates C upply; appreciates Demand; appreciates 19. In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a item in the SA balance of payments; the deposit of funds in a foreign bank account by a SA citizen item in the SA balance of payments. A Debit; also is a debit В Debit; is a credit C Credit; is a debit D Credit; also is a credit 20. The table below shows a section of the national accounts for a small country in 2018. Answer the question that follows using the information provided in the table. 9 800 Consumption expenditure Government expenditure 3 500 Depreciation Exports Imports Gross capital formation (investment) Primary income payments Primary income receipts 500 2 200 1 900 2 500 300 200 The value of Gross Domestic Product (GDP) is: (4r A 16 100 B 19 900 C 16 600 D 15 600 21. To…Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from FOMC Statement Released December 16, 2008 “The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to ¼ percent. Since the Committee’s last meeting labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.” Identify whether the policy action is fiscal or monetary. Identify whether the policy action is expansionary or contractionary. Draw and label the change…
- Question 5 A decrease in one of the components of real GDP, such as Exports will cause the AD curve toRead the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from FOMC Meeting Minutes Press Release February 6, 1981 “Shortly after the November 18 meeting, incoming data indicated that the monetary aggregates were growing considerably faster than the rates consistent with the Committee’s objectives for the September-to-December period… These developments were associated with additional upward pressures on the federal funds rate and other short-term interest rates; in the first statement week after the meeting, the funds rate was at about or somewhat above the upper limit of the range of 13 to 17 percent specified by the Committee, compared with an average of 14 ½ percent in mid-November. In a telephone…11. Complete the following sentence: In terms of the AD-AS model, a decrease in the interest rate leads to a(n) investment spending,a(n) demand and, eventually to a(n)_ in the price level. in in aggregate in aggregate spending, a(n) in total production and (or) a(n). (4 A Decrease; decrease; decrease; decrease; decrease B Increase; increase; increase; increase; increase C Increase; increase; decrease; decrease; decrease D Decrease; decrease; increase; increase; increase 12. A justification for government intervention in the economy arises from the fact that market systems usually produce outcomes, but they do not necessarily produce _outcomes. (- A Efficient; equitable B Equitable; efficient C Efficient; profitable D Profitable; equitable 13. When the govermment uses its overdraft facilities at the central bank, it, in the economy. This is called , the quantity of money financing. A Increases; deflationary B Decreases; inflationary C Decreases; deflationary Increases; inflationary
