1 Determinants Of Aggregate Demand The Following Graph Shows An Increase In Aggregate Demand Ad In A Hypothetical Cou 1 (42.63 KiB) Viewed 14 times
1 Determinants Of Aggregate Demand The Following Graph Shows An Increase In Aggregate Demand Ad In A Hypothetical Cou 2 (23.51 KiB) Viewed 14 times
1. Determinants of aggregate demand The following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD1 to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 90 0 100 +--++ 400 500 200 300 OUTPUT (Billions of dollars) AD2 AD1 600 700 800 (?)
The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to increase aggregate demand. Wealth Taxes Interest Rates The Value of the Domestic Currency Relative to the Foreign Currency Change Needed to Increase AD Increase Decrease
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