Question

Can someone give me explanation or reasoning for any of these and the answer please

1. Refer to the accompanying information for a closed economy. If the government spends $80 billion at each level of GDP, and imposes a lump-sum tax of $100, equilibrium GDP is what?

2. An increase in aggregate expenditures resulting from a decrease in the price level is equivalent to a...

3. The economy experiences an increase in the price level and a decrease in real domestic output. What is a likely explanation?

4. An increase in the aggregate expenditures schedule does what?

Answer 1

2.

It is equivalent to the downward movement along the aggregate demand curve. When price decreases, then aggregate demand increases and vice versa. Here, the movement is along the AD curve.

3.

It is due to the reason that price of inputs has increased. As a result, SRAS curve has shifted to the left. It causes increase in price and decrease in real output.

4.

It shows the increase in real output. The real output increases by the amount of increase, multiplied by spending multiplier. As a result, AD will increase as well as real output in the economy is also going to increase.