Use an aggregate demand and supply diagram to explain how each of the following scenarios affects the equilibrium price level and aggregate output. Consider first the short-run, then the long-run equilibrium for each scenario.

a) Consumers expect a recession, while resource prices rise at the same time.
b) Foreign income falls as domestic technology improves.
c) Foreign price level rises as domestic government cuts taxes.
d) Government spending falls and a higher future price level is expected.
e) Higher future income and lower price level are expected.
f) Resource prices fall and technology improves.

  1. 👍
  2. 👎
  3. 👁
  1. You may find something here that will help you.

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Economics

    Determine whether each of the following would cause a shift in the aggregate demand curve, the aggregate supply curve, neither, or both. Which curve shifts, and in which direction? What happens to aggregate output and the price

  2. econ

    in what ways do the reasons that explain the downward slope of the aggregate demand curve differ from the reasons that explain the slope of the demand curve for a single product?

  3. Macroeconomics

    Suppose the Fed wishes to use monetary policy to close an expansionary gap. a. Should the Fed increase or decrease the money supply? b. If the Fed uses open-market operations, should it buy or sell government securities? c.

  4. lasec

    Question 1 (1.00 points) Cost-push inflation: a. is caused by excessive total spending. b. shifts the nation's production possibilities curve leftward. c. moves the economy inward from its production possibilities curve. d. is a

  1. Economics

    select the correct answer out of all the possQuestion 1 (1.00 points) Question one The natural rate of unemployment is: a. higher than the full-employment rate of unemployment. b. lower than the full-employment rate of

  2. microeconomics

    Use the following to answer questions 1-3: 1. Refer to the above diagram. If demand changes from D1 to D2 at the same time supply changes from S2 to S1, equilibrium price will: A) rise and equilibrium quantity will fall. C) rise,

  3. economics

    How does monopolistic competition differ from pure competition in its basic characteristics? From pure monopoly? Explain fully what product differentiation may involve. Explain how the entry of firms into its industry affects the

  4. Economics

    An expansionary fiscal policy can be partially offset by a(n): a. increase in aggregate demand b. increase in aggregat supply c. depreciation of the dollar d. decrease in net exports

  1. economics

    1. Suppose that the market of laptops is given by following supply and demand curves given below: Qd = 5000 − 3p Qs = 1000 + p. Answer the following questions on excel sheet using the above demand and supply equations. i) Take

  2. Economics

    One supply-side measure introduced by the Reagan administration was a cut in income tax rates. Use an aggregate demand/aggregate supply diagram to show what effect was intended. What might happen if such a tax cut also shifted the

  3. Economics

    Concern about international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply? A. No change B. Aggregate supply will decrease, raising the price

  4. macroeconomics

    1) Suppoer the economy is operating at full employment and foreign countries raise the world price of oil. Assuming policy-makers do not take any actions,describe what will happen to price and output in the short run and long run.

You can view more similar questions or ask a new question.