Explain how each of the following events would affect the aggregate demand curve
a. Lower interest rates
b. A decrease in net exports
c. A decrease in the price level
d. Slower income growth in other countries
e. A decrease in imports
a. Lower interest rates would increase investment spending and consumer spending, particularly on durable goods, which would cause the aggregate demand curve to shift to the right.
b. A decrease in net exports would cause the aggregate demand curve to shift to the left.
c. A decrease in the price level would cause a movement down along the aggregate demand curve.
d. Slower income growth in other countries would decrease U.S. exports, which would cause the aggregate demand curve to shift to the left.
e. A decrease in imports would cause net exports to be greater, causing the aggregate demand curve to shift to the right.
You might also like to view...
You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third. What should determine your decision, if you are rational?
a. the total cost of the magazines compared to the total satisfaction you would receive b. the total amount of satisfaction you would get from the magazines c. the enjoyment you would get from the third magazine d. the cost of the third magazine, including the time it takes to read it e. the cost of the third magazine compared to the additional enjoyment you would get from it
If total profit is maximized, then marginal cost must equal marginal revenue
a. True b. False Indicate whether the statement is true or false