ECONOMICS
AGGREGATE SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Detailed explanation-1: -The aggregate demand curve shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise. The AD curve will shift back to the left as these components fall.
Detailed explanation-2: -It slopes downward because of the wealth effect on consumption, the interest rate effect on investment, and the international trade effect on net exports. The aggregate demand curve shifts when the quantity of real GDP demanded at each price level changes.
Detailed explanation-3: -Which factor would shift the Aggregate Demand curve to the right? a fall in interest rates which increases investment.
Detailed explanation-4: -If households become more optimistic about their future incomes, the aggregate demand curve will shift to the right. when the price level falls, the real value of household wealth rises, and so will consumption.
Detailed explanation-5: -b. The aggregate supply curve shifts rightward (from AS1 to AS2) when resource prices fall or technology improves, and shifts leftward (from AS1 to AS3) when price expectations increase and wages rise as a result.