Question

1. Which direction would each of the following changes in conditions cause the aggregate demand to shift?

1. Consumers expect an economic downturn.
2. Business executives expect an improving business regulation environment.
3. The federal government increases spending on highways, bridges and other infrastructure.
4. U.S. exports to new markets in Africa and Latin America.

2. Which direction would each of the following changes in conditions cause the aggregate supply to shift?

1. Energy costs increase due to increased political tensions in the Middle East.
2. Labor unions agree to a cut in wages due to Covid-19 reduced aggregate expenditure.
3. Increased used of less expensive solar power.
4. Increases in excise tax on all fossil fuels.

3. How does the foreign price effect(or foreign purchases effect) explain increased U.S. exports to the rest of the world?

Answer 1

1. Consumers expect an economic downturn.
   The AD wous shift in as consumers would save more.
2. Business executives expect an improving business regulation environment.
   The AD would shift out as investment would increase
3. The federal government increases spending on highways, bridges and other infrastructure.
   The AD would shift out as government spending increases.
4. U.S. exports to new markets in Africa and Latin America.
   The AD would shift out as net exports increase.
   
   Pls post other questions separately.