Which of the following will shift the aggregate demand curve to the right? a.A new technology is developed that will increase profits. b.Foreign economies fall into recession, reducing their demand for domestic exports. c.The government reduces purchases to balance the budget. d.Income taxes are raised e.Consumers become pessimistic about the future.

5 Which of the following is not a reason for the increase in aggregate demand? a. Decrease in imports b. Increase in government expenditure c. Increase in consumption d. None of the options Clear my choice

1. In the following table, determine how each event likely effects potential output (a.k.a., long-run aggregate supply).    Direction of Potential Output Shift Event Left Right No Shift The government allows more immigration of working-age adults.       For environmental and safety reasons, the government requires that the country’s nuclear power plants be permanently shut down.       An investment tax credit increases the rate at which firms acquire machinery and equipment.         2. In the following table, determine how each event affects the position of the aggregate demand curve.    Direction of AD Curve Shift Event Left Right No Shift A decrease in consumer confidence (suggests people believe a contraction/recession coming)       A decrease in individual income tax rates       An increase in the value/price of housing         3. What effect would an increase in aggregate demand…

A) Discuss, with examples, factors or events that might shift the short run aggregate supply curve. B) Imagine an economy is in long run equilibrium. Now suppose that firms experience an increase in their cost of production (say, due to a natural disaster). i. Explain, with graphs, the macroeconomic impact of such an increase in production costs. ii. Describe how policymakers could use fiscal policy to counteract the effects of increased cost of production.