econ 202 hw w7

this does not cause AD to shift

a change in the price level

the international-trade effect refers to the fact that an increase in the price level will result in

a decrease in exports and and an increase in imports.

which of the following would cause an a decrease in AD

a decrease in government spending

which of the following cause the short-run AS curve to shift to the right

a positive technological change

the aggregate demand curve slopes downward [BLANK], and the demand curve for an individual product slopes downward [BLANK].

due to the wealth effect, the interest-rate effect and the international-trade effect, due to consumers substituting the more expensive product for cheaper goods.

Aggregate Demand (AD) is comprised of expenditure components that include

government spending consumption investment next exports

the interest rate effect refers to the fact that a higher price level results in

higher interest rates and lower investments

the short run AS curve slopes upward because of all the following reasons except

in the short run, an unexpected change in the price of import resource can change the cost to firms.

firms become more optimistic and increase their spending on machinery and equipment. Because this is a change in [BLANK], it will cause a [BLANK] the aggregate demand curve.

investment, shift to the right in

according to the wealth effect, when the [BLANK] falls, the [BLANK] rises.

price level; the real value of household wealth

the recession of 07-09 made many consumer pessimistic about their future incomes. how does this increased pessimism affect the AD curve?

shift AD curve to the left

more capital accumulation will cause the long run aggregate supply curve to

shift to the right

the US economy experience 4 percent inflation. Because this is a change in [BLANK], it will cause a [BLANK] the aggregate demand curve.

the price level, movement along

increases in personal income taxes or business taxes will make aggregate demand curve shift [BLANK]

to the left

the wealth effect refers to the fact that

when the price level falls, the real value of household wealth rises, and so will consumption

the aggregate demand curve slopes downward for all of the following reasons except

A lower price level makes imports from other countries less expensive and US citizens buy more imports

if AD just increase, what could have caused the increase?

An increase in government purchases

increases in the value of the dollar relative to foreign currencies will make the aggregate demand curve shift [BLANK]

To the left

this will shift AD curve to the right, all else equal.

an increase in net exports

which of the following causes the short run AS curve to shift to the left

an increase in the expected price of an important natural resource

how can government policies shift the aggregate demand curve to the right

by increasing gov purchases

the long-run AS curve is vertical because in the long run,

changes in the price level do not affect potential GDP, as potential GDP depends on the size of the labor force, capital stock and technology

the federal government increases taxes in an attempt to reduce a budget deficit. Because this is a change in [BLANK], it will cause a [BLANK] the aggregate demand curve.

consumption, shift to the left in

higher personal income taxes

decrease AD