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

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

Post by answerhappygod »

Economists use the model of aggregate supply and aggregate
demand (AS-AD) 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 their spending on health
b. Changes in immigration laws lead to an influx of workers into a
country
c. There is a change in expectations and firms expect the price
level to be
lower in the future
d. Consumer sentiment changes and they feel more optimistic about
the
economy
e. The Central Bank increases the reserve requirements and
now
commercial banks must keep higher cash reserves
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