Use the following figures to answer the next question.
A decline in aggregate expenditures from AE2 to AE1 resulting from the real-balances, interest-rate, and foreign purchases effects would be depicted as a ________.
A. shift of aggregate demand from AD2 to AD1
B. shift of aggregate demand from AD1 to AD2
C. movement from A to C along aggregate demand curve AD1
D. movement from C to A along aggregate demand curve AD1
Answer: D
Economics
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Holding supply constant, an increase in demand will
A) increase both the quantity and price. B) increase the equilibrium price and decrease the equilibrium quantity. C) decrease the equilibrium price and increase the equilibrium quantity. D) decrease both the quantity and price.
Economics
Other things equal, an increase in government purchases combined with an equal increase in taxes would: a. increase AD
b. decrease AD dramatically. c. decrease AD slightly. d. leave AD unchanged.
Economics