An increase in the price level, other things equal, will shift the _____.
The foreign purchases, interest rate, and real-balances effects explain why the ____________.
Which of the following events would most likely reduce aggregate demand?
The long-run aggregate supply curve is _____.
Correct option is option A. When there is an increase in the price level, wealth is reduced so consumption is reduced. also demand for money increase is which increases the interest rate and reduces investment. This causes imports to increase and exports to falls on net exports also fall
Option A is correct because these are the three determinants of downward sloping aggregate demand function.
Option d is correct. when interest rate increases investment demand decreases and this decreases the aggregate demand
Option D is correct. in the long run aggregate supply can only be increased by change in resources or technology. Therefore it is not related to price and is vertical in nature.
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