Question

5. Indicate how each of the following events would affect the aggregate demand AD curve:

a short-run decrease in the price level

an increase in consumer confidence on the price level and real GDP

an increase in government purchases

Answer 1

ANSWER:

1) A decrease the price level will just aim a development along the total interest bend and purchasers will be expending increasingly more of the products at a lower cost. all out total interest will increment.

2) this will move the total interest bend to one side and the new balance will be at a higher yield and more significant expense. The bend will move to one side.

3) An increase in government purchase will move the total interest bend to one side and the new balance will be at a higher yield and more significant expense.

PLEASE UPVOTE.

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