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 tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased. Consumers may decide to spend less and save more if they expect prices to rise in the future.
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: -b. decrease consumption, which shifts aggregate demand left.
Detailed explanation-4: -In the short run, a decrease in consumer spending and investment spending will lead to a fall in aggregate demand. The decline in aggregate demand is depicted by the change in the aggregate demand curve to the left. This shift causes a fall in both the price level and real GDP.
Detailed explanation-5: -The aggregate-supply curve might shift to the left because of a decline in the economy’s capital stock, labor supply, or productivity, or an increase in the natural rate of unemployment, all of which shift both the long-run and short-run aggregate-supply curves to the left.