Economists use the model of aggregate supply and aggregate demand (AS-AD model) to explain short run fluctuations of GDP

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Economists use the model of aggregate supply and aggregate demand (AS-AD model) to explain short run fluctuations of GDP

Post by answerhappygod »

Economists use the model of aggregate supply and aggregate
demand (AS-AD
model) to explain short run fluctuations of GDP around its long run
trend.
i) In the context of the AS-AD model, explain which curve(s) the
following
events would shift, which way, and why:
a. The government increases income tax in their budget
b. An improvement in existing technology
c. There is a change in expectations and firms expect the price
level to be
higher in the future
d. Consumers sentiment changes and they feel more pessimistic
about
the economy
e. The central bank engages in open market operations and buys
bonds
from the public.
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply