In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of
A) a decrease in the real interest rate.
B) a decrease in the buying power of money.
C) an increased expectation of a recession that lowers the expected rate of profit from investment.
D) a decrease in the foreign exchange rate.
E) an increase in the price level.
C
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Which of the following is included in physical capital?
a. Roads and bridges b. A university graduate in physics c. An astrophysicist d. A high school diploma or college degree e. A successful entrepreneur
Suppose the Federal Reserve wants to increase the money supply. Which combination of actions would lead to the appropriate effect?
a. Increase the discount rate, decrease the reserve ratio, sell bonds. b. Increase the discount rate, decrease the reserve ratio, buy bonds. c. Decrease the discount rate, decrease the reserve ratio, buy bonds. d. Decrease the discount rate, increase the reserve ratio, buy bonds. e. Decrease the discount rate, decrease the reserve ratio, sell bonds.