Do foreign purchases hurt the aggregate demand curve when the dollar is worth less?
Q. Since the value of a dollar has fallen against other currencies, our goods will be cheaper to foreign countries but still be the same for US citizens. Because of this, foreigners demand more American aggregate output. Will this make the aggregate demand curve move up or down?
Asked by Buster B - Wed Feb 25 15:32:50 2009 - - 2 Answers - 0 Comments
A. Aggregate Demand consists of Consumption+Investment+Go vernment Spending+Net exports, as you know. When the value of U.S currency goes down, exports will increase as you said, and imports goes down, which means americans will consume more american goods. So, AD curve shifts right.
Answered by fromeasternworld - Fri Feb 27 23:19:01 2009
Q. Since the value of a dollar has fallen against other currencies, our goods will be cheaper to foreign countries but still be the same for US citizens. Because of this, foreigners demand more American aggregate output. Will this make the aggregate demand curve move up or down?
Asked by Buster B - Wed Feb 25 15:32:50 2009 - - 2 Answers - 0 Comments
A. Aggregate Demand consists of Consumption+Investment+Go vernment Spending+Net exports, as you know. When the value of U.S currency goes down, exports will increase as you said, and imports goes down, which means americans will consume more american goods. So, AD curve shifts right.
Answered by fromeasternworld - Fri Feb 27 23:19:01 2009
What is the initial effect of the tax reduction on aggregate demand?
Q. Suppose the gov t imposed a tax reduction in the amount of $100 billion, with no crowding out effect and an MPC of 2/3. What is the initial effect of the tax reduction on aggregate demand? What is the multiplied effect? Initial shift = Multiplied shift =
Asked by mpp05074 - Thu Jul 30 09:55:38 2009 - - 2 Answers - 0 Comments
A. Marginal Propensity to Consume is 2/3. A tax cut will increase aggregate demand by $100 billion initially. However, people will save (1/3) of the money, and so the multiplied shift is $100 billion multiplied by (2/3)
Answered by lennie - Thu Jul 30 12:39:15 2009
Q. Suppose the gov t imposed a tax reduction in the amount of $100 billion, with no crowding out effect and an MPC of 2/3. What is the initial effect of the tax reduction on aggregate demand? What is the multiplied effect? Initial shift = Multiplied shift =
Asked by mpp05074 - Thu Jul 30 09:55:38 2009 - - 2 Answers - 0 Comments
A. Marginal Propensity to Consume is 2/3. A tax cut will increase aggregate demand by $100 billion initially. However, people will save (1/3) of the money, and so the multiplied shift is $100 billion multiplied by (2/3)
Answered by lennie - Thu Jul 30 12:39:15 2009
How would a stock market crash affect aggregate demand?
Q. If there were to be a stock market crash, how would it affect aggregate demand? And what if there had been equilibrium employment (i.e. full employment) what could a government do or what policies could it introduce to restore full employment?
Asked by stoby - Sun Jul 13 15:34:10 2008 - - 2 Answers - 0 Comments
A. recession of course. decrease int rates and a set of monetary adjustments to keep position blanced off course public exp could hav een here but more reponsive signalling needs to be made eg. tx holidays credit rating, yet publc exp sees t be involved in all this , gov needs to intervene but tat could suprt insteadof exclusion.
Answered by subhrodip - Sun Jul 13 16:33:25 2008
Q. If there were to be a stock market crash, how would it affect aggregate demand? And what if there had been equilibrium employment (i.e. full employment) what could a government do or what policies could it introduce to restore full employment?
Asked by stoby - Sun Jul 13 15:34:10 2008 - - 2 Answers - 0 Comments
A. recession of course. decrease int rates and a set of monetary adjustments to keep position blanced off course public exp could hav een here but more reponsive signalling needs to be made eg. tx holidays credit rating, yet publc exp sees t be involved in all this , gov needs to intervene but tat could suprt insteadof exclusion.
Answered by subhrodip - Sun Jul 13 16:33:25 2008
What effects would an increase of excise taxes on cigarettes have on aggregate demand or aggregate supply?
Q. What effects would each of the following have on aggregate demand or aggregate supply? In each case state where the aggregate demand effected and in which direction or the aggregate supply is effected and in which direction. Assume all other things remain constant. a. A widespread fear of depression on the part of consumers. b. A large purchase of US wheat by Russia. c. A $1 increase in the excise tax on cigarettes. d. A reduction in interest rates at each price level.
Asked by Allen W - Tue Jun 3 14:35:12 2008 - - 1 Answers - 0 Comments
A. a. A widespread fear of depression on the part of consumers. As consumers fear a depression, they will save more out of precaution. Hence, aggregate demand will decrease. b. A large purchase of US wheat by Russia. The increase in demand will incrase prices for wheat in the U.S., which will make wheat production more attractive to U.S. farmers. Hence, aggregate supply will increase. c. A $1 increase in the excise tax on cigarettes. It has been shown that higher prices for cigarettes discourage smoking. Every 10 percent increase in the price of cigarettes reduced youth smoking by about seven percent and overall cigarette consumption by about four percent. Hence, aggregate demand for cigarettes will decrease. d. A reduction in interest… [cont.]
Answered by Felix_FINA4242 - Tue Jun 3 22:18:54 2008
Q. What effects would each of the following have on aggregate demand or aggregate supply? In each case state where the aggregate demand effected and in which direction or the aggregate supply is effected and in which direction. Assume all other things remain constant. a. A widespread fear of depression on the part of consumers. b. A large purchase of US wheat by Russia. c. A $1 increase in the excise tax on cigarettes. d. A reduction in interest rates at each price level.
Asked by Allen W - Tue Jun 3 14:35:12 2008 - - 1 Answers - 0 Comments
A. a. A widespread fear of depression on the part of consumers. As consumers fear a depression, they will save more out of precaution. Hence, aggregate demand will decrease. b. A large purchase of US wheat by Russia. The increase in demand will incrase prices for wheat in the U.S., which will make wheat production more attractive to U.S. farmers. Hence, aggregate supply will increase. c. A $1 increase in the excise tax on cigarettes. It has been shown that higher prices for cigarettes discourage smoking. Every 10 percent increase in the price of cigarettes reduced youth smoking by about seven percent and overall cigarette consumption by about four percent. Hence, aggregate demand for cigarettes will decrease. d. A reduction in interest… [cont.]
Answered by Felix_FINA4242 - Tue Jun 3 22:18:54 2008
What causes Aggregate supply to increase and decrease then aggregate demand to increase and decrease?
Q. What causes Aggregate supply to increase and decrease then aggregate demand to increase and decrease
Asked by yujul;[, - Wed Nov 11 19:41:18 2009 - - 1 Answers - 0 Comments
A. Consumption Investment Government Spending Imports Exports Monetary Policy Budgetary Policy and Microeconomic reforms.
Answered by | Raviisher | - Wed Nov 11 21:15:04 2009
Q. What causes Aggregate supply to increase and decrease then aggregate demand to increase and decrease
Asked by yujul;[, - Wed Nov 11 19:41:18 2009 - - 1 Answers - 0 Comments
A. Consumption Investment Government Spending Imports Exports Monetary Policy Budgetary Policy and Microeconomic reforms.
Answered by | Raviisher | - Wed Nov 11 21:15:04 2009
Having trouble with aggregate supply and demand curves?
Q. Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. (Draw a graph. I don't think anyone can do that. But it would be awesome cause thats a huge part I don't get) (a) Households decide to save a larger share of their income. (b) Florida orange groves suffer a prolonged period of below freezing temperatures. (c) Increase job opportunities overseas cause many people to leave the country.
Asked by Brad - Sun Dec 9 23:44:10 2007 - - 1 Answers - 0 Comments
A. Isn't the macro-economy so much fun! (or not) A. Left-ward shift of AD curve only. Greater household saving means less household consumption at every price level so the whole AD curve shifts to the left. B. Neither. The AD-AS-LRAS model doesn't reflect sector specific shocks. C. Left-ward shift of AD and AS curves. More people moving abroad means fewer households to drive consumer spending so AD shifts to the left. People moving abroad also means wages must rise here to encourage some workers to stay. This drives up the cost of production so the AS curve shifts to the left.
Answered by Hubris252 - Mon Dec 10 06:26:21 2007
Q. Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, or neither. (Draw a graph. I don't think anyone can do that. But it would be awesome cause thats a huge part I don't get) (a) Households decide to save a larger share of their income. (b) Florida orange groves suffer a prolonged period of below freezing temperatures. (c) Increase job opportunities overseas cause many people to leave the country.
Asked by Brad - Sun Dec 9 23:44:10 2007 - - 1 Answers - 0 Comments
A. Isn't the macro-economy so much fun! (or not) A. Left-ward shift of AD curve only. Greater household saving means less household consumption at every price level so the whole AD curve shifts to the left. B. Neither. The AD-AS-LRAS model doesn't reflect sector specific shocks. C. Left-ward shift of AD and AS curves. More people moving abroad means fewer households to drive consumer spending so AD shifts to the left. People moving abroad also means wages must rise here to encourage some workers to stay. This drives up the cost of production so the AS curve shifts to the left.
Answered by Hubris252 - Mon Dec 10 06:26:21 2007
Which of the following would most likely shift the aggregate demand curve to the right?
Q. Which of the following would most likely shift the aggregate demand curve to the right? A. An increase in stock prices that increases consumer wealth. B. Increased fear that a recession will cause workers to lose their jobs. C. An increase in personal income tax rates. D. A reduction in household borrowing because of tighter lending practices.
Asked by Ocean - Tue Jul 7 18:14:27 2009 - - 1 Answers - 0 Comments
A. Its definitely A because if the curve moves to the right it means demand is increased. and if consumer wealth increases then they will ahv more money to buy stuff which will increase the aggregate demand and shift the curve to the right
Answered by Brad. - Tue Jul 7 18:19:23 2009
Q. Which of the following would most likely shift the aggregate demand curve to the right? A. An increase in stock prices that increases consumer wealth. B. Increased fear that a recession will cause workers to lose their jobs. C. An increase in personal income tax rates. D. A reduction in household borrowing because of tighter lending practices.
Asked by Ocean - Tue Jul 7 18:14:27 2009 - - 1 Answers - 0 Comments
A. Its definitely A because if the curve moves to the right it means demand is increased. and if consumer wealth increases then they will ahv more money to buy stuff which will increase the aggregate demand and shift the curve to the right
Answered by Brad. - Tue Jul 7 18:19:23 2009
Macroeconomics help? By how much would it have to increase aggregate demand in order to achieve this goal?
Q. Suppose that the MPC is 0.85 and that $14 trillion of real GDP is currently being produced. The government wants to increase real GDP to $15 trilion. By how much would it have to increase Aggregate Demand in order to achieve this goal? I have no ideo how to start this problem please help.
Asked by Ro - Sun Nov 29 21:20:42 2009 - - 1 Answers - 0 Comments
A. Multiplier=1/.15=6.7. The goal is 15-14=$1trillion. The government has to increase spending = 1/6.7=$0.15billion.
Answered by Michelle B - Sun Nov 29 21:36:13 2009
Q. Suppose that the MPC is 0.85 and that $14 trillion of real GDP is currently being produced. The government wants to increase real GDP to $15 trilion. By how much would it have to increase Aggregate Demand in order to achieve this goal? I have no ideo how to start this problem please help.
Asked by Ro - Sun Nov 29 21:20:42 2009 - - 1 Answers - 0 Comments
A. Multiplier=1/.15=6.7. The goal is 15-14=$1trillion. The government has to increase spending = 1/6.7=$0.15billion.
Answered by Michelle B - Sun Nov 29 21:36:13 2009
Can undocumented workers affect aggregate demand?
Q. I know that undocumented workers are not included in the GDP. However, can they still have an affect on aggregate demand as it relates to the GDP?
Asked by Like2Learn - Wed May 14 21:44:21 2008 - - 1 Answers - 0 Comments
A. Yes, they do affect AD. They receive undocumented wages and after that they have real purchasing power (disposable income) which can be spend on legal market, thus are component of AD.
Answered by Yuri - Wed May 14 22:05:04 2008
Q. I know that undocumented workers are not included in the GDP. However, can they still have an affect on aggregate demand as it relates to the GDP?
Asked by Like2Learn - Wed May 14 21:44:21 2008 - - 1 Answers - 0 Comments
A. Yes, they do affect AD. They receive undocumented wages and after that they have real purchasing power (disposable income) which can be spend on legal market, thus are component of AD.
Answered by Yuri - Wed May 14 22:05:04 2008
In the long run, does an increase in aggregate demand change real GDP?
Q. I believe that an increase in long run aggregate demand affects the price level, but not real GDP. Does anyone know why this is?
Asked by eternalgrace02 - Sat Apr 26 11:30:39 2008 - - 1 Answers - 0 Comments
A. The initial effect of an increase in aggregate demand is to reduce the ratio of supply to demand and this raises the price untill the two balance again. However once the prices are growing, the effect on the supply is to stimulate it so that the above effect of the increased demand is eventually satisfied by almost the same price. Now you are asking not about prices but about long-term GDP or quantities of goods when multiplied by their long-term prices. The quantity will have grown by a lot and the prices by a small fraction (all other things being assumed not to have changes). So with demand rise so too will the long-term GDP. The point I should also be making is that the aggregate demand (about which your question is based)… [cont.]
Answered by Macrocompassion - Sat Apr 26 11:48:36 2008
Q. I believe that an increase in long run aggregate demand affects the price level, but not real GDP. Does anyone know why this is?
Asked by eternalgrace02 - Sat Apr 26 11:30:39 2008 - - 1 Answers - 0 Comments
A. The initial effect of an increase in aggregate demand is to reduce the ratio of supply to demand and this raises the price untill the two balance again. However once the prices are growing, the effect on the supply is to stimulate it so that the above effect of the increased demand is eventually satisfied by almost the same price. Now you are asking not about prices but about long-term GDP or quantities of goods when multiplied by their long-term prices. The quantity will have grown by a lot and the prices by a small fraction (all other things being assumed not to have changes). So with demand rise so too will the long-term GDP. The point I should also be making is that the aggregate demand (about which your question is based)… [cont.]
Answered by Macrocompassion - Sat Apr 26 11:48:36 2008
What Does the Price Level Refer To In the Definition on Aggregate Demand?
Q. Aggregate demand is the total demand of goods and services at a given time and price level... but the price of what... how can you have a price of more than one thing, i.e. if a chocolate bar cost x, and a service costs y... if you see what Im getting at, I dont understand what the price level is measuring! Thank you
Asked by Tom Jones - Fri Mar 12 10:08:38 2010 - - 3 Answers - 0 Comments
A. the cost of something relative to your buying power. price level is like price, but accounting for inflation. i.e. if your wages goes up as the same rate as the price of stuff, then your buying power doesn't change so price levels remain the same. If your wages goes up faster than the inflated price of goods, you have higher buying power. Although the price level does not change, you can afford more. If price level goes up faster than your wages, you are technically poorer than you used to be. e.g. I get 1 every month. Suppose I buy 5 gallons of petrol for 1 every month at 20p per gallon. Now suppose the price of petrol went up by 10% but my wages only went up by 5%... I have 1.05 per month but the cost of 5 gallons of petrol… [cont.]
Answered by Ingenious - Fri Mar 12 10:37:44 2010
Q. Aggregate demand is the total demand of goods and services at a given time and price level... but the price of what... how can you have a price of more than one thing, i.e. if a chocolate bar cost x, and a service costs y... if you see what Im getting at, I dont understand what the price level is measuring! Thank you
Asked by Tom Jones - Fri Mar 12 10:08:38 2010 - - 3 Answers - 0 Comments
A. the cost of something relative to your buying power. price level is like price, but accounting for inflation. i.e. if your wages goes up as the same rate as the price of stuff, then your buying power doesn't change so price levels remain the same. If your wages goes up faster than the inflated price of goods, you have higher buying power. Although the price level does not change, you can afford more. If price level goes up faster than your wages, you are technically poorer than you used to be. e.g. I get 1 every month. Suppose I buy 5 gallons of petrol for 1 every month at 20p per gallon. Now suppose the price of petrol went up by 10% but my wages only went up by 5%... I have 1.05 per month but the cost of 5 gallons of petrol… [cont.]
Answered by Ingenious - Fri Mar 12 10:37:44 2010
How do you do aggregate demand curve equations?
Q. Ok, here's my question: If aggregate demand curve in an economy is Y = 40,000 - 20,000 p , current inflation equals 0.06 (6 %), and potential output (Y*) equals 38,400, then in the short run equilibrium output equals ___ and in the long run the inflation rate equals ___ percent. The ANSWER is 38,800; 8 But I have NO idea how they got that. Can anyone help explain this to me? MUCH appreciated
Asked by Hannah - Sat Apr 18 21:44:09 2009 - - 1 Answers - 0 Comments
A. Y = 40,000 - 20,000p p=rate of inflation=0.06 Y = 40,000 - 20,000(.06) Y = 40,000 - 1,200 Y = 38,800
Answered by soupisgoodfood - Sun Apr 19 02:44:31 2009
Q. Ok, here's my question: If aggregate demand curve in an economy is Y = 40,000 - 20,000 p , current inflation equals 0.06 (6 %), and potential output (Y*) equals 38,400, then in the short run equilibrium output equals ___ and in the long run the inflation rate equals ___ percent. The ANSWER is 38,800; 8 But I have NO idea how they got that. Can anyone help explain this to me? MUCH appreciated
Asked by Hannah - Sat Apr 18 21:44:09 2009 - - 1 Answers - 0 Comments
A. Y = 40,000 - 20,000p p=rate of inflation=0.06 Y = 40,000 - 20,000(.06) Y = 40,000 - 1,200 Y = 38,800
Answered by soupisgoodfood - Sun Apr 19 02:44:31 2009
Will Deflation cause aggregate demand for Real GDP to rise or fall?
Q. Will Deflation cause aggregate demand for Real GDP to rise or fall and why? Wrong, it can't go up because deflation is a collapse in aggregate demand.
Asked by Matin - Tue Mar 9 22:29:22 2010 - - 3 Answers - 0 Comments
A. Historically deflation is correlated with GDP, that is GDP falls. The theory that predicts that in will increase aggregate demand assume wages remain constant, but that is not true in most the period we have experienced deflation. In fact deflation is considered so harmful to the economy that it a major objective of monetary policy to prevent deflation.
Answered by meg - Wed Mar 10 00:11:41 2010
Q. Will Deflation cause aggregate demand for Real GDP to rise or fall and why? Wrong, it can't go up because deflation is a collapse in aggregate demand.
Asked by Matin - Tue Mar 9 22:29:22 2010 - - 3 Answers - 0 Comments
A. Historically deflation is correlated with GDP, that is GDP falls. The theory that predicts that in will increase aggregate demand assume wages remain constant, but that is not true in most the period we have experienced deflation. In fact deflation is considered so harmful to the economy that it a major objective of monetary policy to prevent deflation.
Answered by meg - Wed Mar 10 00:11:41 2010
Plzzz help me on this equilibrium and aggregate demand increase question?
Q. Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases. As the economy moves to short-run macroeconomics equilibrium, there is: A) a recessionary gap with high inflation. B) a recessionary gap with high inflation. C) an inflationary gap with high unemployment. D) an inflationary gap with low unemployment.
Asked by GetSmart - Fri Jul 25 15:18:09 2008 - - 2 Answers - 0 Comments
A. The answer is D. Here is why: The setup of the problem assumes that we are producing just enough to fill the current aggregate demand. Now if demand increases, it will outpace supply. This will cause the price of goods to rise. While supply is racing to catch up, there will be less unemployment while producers struggle to make more goods to meet the increased demand.
Answered by Hello G - Fri Jul 25 15:35:11 2008
Q. Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases. As the economy moves to short-run macroeconomics equilibrium, there is: A) a recessionary gap with high inflation. B) a recessionary gap with high inflation. C) an inflationary gap with high unemployment. D) an inflationary gap with low unemployment.
Asked by GetSmart - Fri Jul 25 15:18:09 2008 - - 2 Answers - 0 Comments
A. The answer is D. Here is why: The setup of the problem assumes that we are producing just enough to fill the current aggregate demand. Now if demand increases, it will outpace supply. This will cause the price of goods to rise. While supply is racing to catch up, there will be less unemployment while producers struggle to make more goods to meet the increased demand.
Answered by Hello G - Fri Jul 25 15:35:11 2008
What is the effects of the following events on the Aggregate Demand curve.?
Q. a) An increase in RGDP in Europe and Japan b) A decline in U.S. households expectations of their future income. c) A reduction in Medicaid and Medicare benefit levels. d) An increase in business expectations of future aggregate demand growth e) An increase in government spending on military hardware f) A sharp decline in the value of foreign currencies relative to the value of the $. g) A decline in the prices of real estate and existing residential housing. h) A rise in the price level due to a sharp increase in the price of oil.
Asked by Cer - Wed Jun 18 19:32:03 2008 - - 1 Answers - 0 Comments
A. What is the effects of the following events on the Aggregate Demand curve.? a) An increase in RGDP in Europe and Japan -- Aggregate demand rises. b) A decline in U.S. households expectations of their future income. -- Aggregate Demand tends to fall c) A reduction in Medicaid and Medicare benefit levels. -- Aggregate demand is unaffected largely as private expenditure on medical treatment rises but total may tend to fall d) An increase in business expectations of future aggregate demand growth -- Increases aggregate demand through higher capital expenditure by businesses e) An increase in government spending on military hardware --Increases aggregate demand f) A sharp decline in the value of foreign currencies relative to the value of the… [cont.]
Answered by sensekonomikx - Sun Jun 22 08:27:40 2008
Q. a) An increase in RGDP in Europe and Japan b) A decline in U.S. households expectations of their future income. c) A reduction in Medicaid and Medicare benefit levels. d) An increase in business expectations of future aggregate demand growth e) An increase in government spending on military hardware f) A sharp decline in the value of foreign currencies relative to the value of the $. g) A decline in the prices of real estate and existing residential housing. h) A rise in the price level due to a sharp increase in the price of oil.
Asked by Cer - Wed Jun 18 19:32:03 2008 - - 1 Answers - 0 Comments
A. What is the effects of the following events on the Aggregate Demand curve.? a) An increase in RGDP in Europe and Japan -- Aggregate demand rises. b) A decline in U.S. households expectations of their future income. -- Aggregate Demand tends to fall c) A reduction in Medicaid and Medicare benefit levels. -- Aggregate demand is unaffected largely as private expenditure on medical treatment rises but total may tend to fall d) An increase in business expectations of future aggregate demand growth -- Increases aggregate demand through higher capital expenditure by businesses e) An increase in government spending on military hardware --Increases aggregate demand f) A sharp decline in the value of foreign currencies relative to the value of the… [cont.]
Answered by sensekonomikx - Sun Jun 22 08:27:40 2008
If aggregate demand increases, which results in increased equilibrium real GDP and employment?
Q. but the price level remains unchanged, we can assume that the aggregate demand curve (a) is horizontal. (b) intersects a horizontal segment of the aggregate supply curve. (c) intersects an upward-sloping segment of the aggregate supply curve. (d) intersects a vertical segment of the aggregate supply curve. (e) is vertical.
Asked by tj - Fri Nov 6 09:41:09 2009 - - 1 Answers - 0 Comments
A. E
Answered by MyNameAShadi - Fri Nov 6 15:13:12 2009
Q. but the price level remains unchanged, we can assume that the aggregate demand curve (a) is horizontal. (b) intersects a horizontal segment of the aggregate supply curve. (c) intersects an upward-sloping segment of the aggregate supply curve. (d) intersects a vertical segment of the aggregate supply curve. (e) is vertical.
Asked by tj - Fri Nov 6 09:41:09 2009 - - 1 Answers - 0 Comments
A. E
Answered by MyNameAShadi - Fri Nov 6 15:13:12 2009
why does a reduction in aggregate demand reduce real output rather than the price level?
Q. why might a full strength multiplier apply to a decrease in aggregate demand?
Asked by tayfano - Thu Feb 25 01:45:53 2010 - - 2 Answers - 0 Comments
A. if no one WANTS it, then why reduce the price to force consumerism? Then more resources will be used up. Plus, the same amount of work goes into getting it so why make things cheaper? You'd be screwing yourself.
Answered by God Despises The IRS - Thu Feb 25 02:07:14 2010
Q. why might a full strength multiplier apply to a decrease in aggregate demand?
Asked by tayfano - Thu Feb 25 01:45:53 2010 - - 2 Answers - 0 Comments
A. if no one WANTS it, then why reduce the price to force consumerism? Then more resources will be used up. Plus, the same amount of work goes into getting it so why make things cheaper? You'd be screwing yourself.
Answered by God Despises The IRS - Thu Feb 25 02:07:14 2010
how does money supply increase aggregate demand?
Q. how does this happen in the long run? lets say you have 1 dollar, and there are 2 apples that cost one dollar. you can buy 1 apple but if i inject money into the economy, and give you 4 extra dollars for free, but then this causes inflation and each apples now cost 5 dollars each, you can still buy only one apple. so how does money supply increase aggregate demand?
Asked by AcE - Wed Nov 18 14:21:14 2009 - - 1 Answers - 1 Comments
A. It doesn't. Keynesian economics is only concerned with maintaining short term growth. Essentially, it is organized around managing the economy for the next election cycle. When confronted with questions like these Keynes himself would say: "In the long run, we're all dead." In order for sustainable economic progress to occur, production must drive the economy. Say's Law remains in effect no matter how much the Keynesians try to refute it. All the advanced mathematics in the world can't make up for the flawed premises of John Maynard Keynes.
Answered by mtlmnr49 - Wed Nov 18 14:48:53 2009
Q. how does this happen in the long run? lets say you have 1 dollar, and there are 2 apples that cost one dollar. you can buy 1 apple but if i inject money into the economy, and give you 4 extra dollars for free, but then this causes inflation and each apples now cost 5 dollars each, you can still buy only one apple. so how does money supply increase aggregate demand?
Asked by AcE - Wed Nov 18 14:21:14 2009 - - 1 Answers - 1 Comments
A. It doesn't. Keynesian economics is only concerned with maintaining short term growth. Essentially, it is organized around managing the economy for the next election cycle. When confronted with questions like these Keynes himself would say: "In the long run, we're all dead." In order for sustainable economic progress to occur, production must drive the economy. Say's Law remains in effect no matter how much the Keynesians try to refute it. All the advanced mathematics in the world can't make up for the flawed premises of John Maynard Keynes.
Answered by mtlmnr49 - Wed Nov 18 14:48:53 2009
Which of the following government policies shift the aggregate demand curve to the right? ?
Q. Which of the following government policies shift the aggregate demand curve to the right? a. Increasing personal income taxes. B. Increasing business taxes. C. Increasing government purchases. D. All of the government policies cited here.
Asked by bob - Sat Nov 22 19:26:08 2008 - - 2 Answers - 0 Comments
Q. Which of the following government policies shift the aggregate demand curve to the right? a. Increasing personal income taxes. B. Increasing business taxes. C. Increasing government purchases. D. All of the government policies cited here.
Asked by bob - Sat Nov 22 19:26:08 2008 - - 2 Answers - 0 Comments
Increase in Household Savings on Aggregate Demand Curve?
Q. Everything is in the long run... If there's an increase in household savings, then aggregate demand shifts to the left. I know that: -the price level decreases -consumption decreases BUT why does investment increase and why do interest rates decrease? Thanks!
Asked by honeybee - Wed May 5 23:58:44 2010 - - 1 Answers - 0 Comments
A. You're right about the decrease in price level and consumption. But it is because of the shift of aggregate demand curve to the left will cause a shift of the LM curve to the right. It cause a lower interest rate and an increase in money supply. Your $100 bill can buy more things because of lower price. That means an increase in money supply.And an increase in money supply causes the interest rate to decrease. A lower interest rate stimulates investment.
Answered by Anjaree - Thu May 6 00:33:50 2010
Q. Everything is in the long run... If there's an increase in household savings, then aggregate demand shifts to the left. I know that: -the price level decreases -consumption decreases BUT why does investment increase and why do interest rates decrease? Thanks!
Asked by honeybee - Wed May 5 23:58:44 2010 - - 1 Answers - 0 Comments
A. You're right about the decrease in price level and consumption. But it is because of the shift of aggregate demand curve to the left will cause a shift of the LM curve to the right. It cause a lower interest rate and an increase in money supply. Your $100 bill can buy more things because of lower price. That means an increase in money supply.And an increase in money supply causes the interest rate to decrease. A lower interest rate stimulates investment.
Answered by Anjaree - Thu May 6 00:33:50 2010
From Yahoo Answer Search: 'Aggregate demand'
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Sun, 22 Aug 2010 16:27:03 GMT+00:00
Livemint Low growth and employment in the US, sharply reduced government spending in Europe and a sputtering Chinese economy, all point to a drop in aggregate demand ...
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here Aggregate Supply is defined as the total supply of goods and services by a national economy during a specific time period Find out more about the definition here 4 Unemployment Unemployment refers to the numbers of workers actively seeking work but who cannot find work The actual number of unemployed workers in Ireland is given
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These assumptions imply that the private sector cannot aim to run a financial surplus of more than 4% of GDP without sapping . aggregate demand. . This is a serious problem because our analysis a few weeks ago concluded that the private ...
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