15. When taxes increase, consumption decreases. How is this situation represented in the aggregate demand and aggregate...

15. When taxes increase, consumption decreases. How is this situation represented in the aggregate demand and aggregate supply model?

a.	by a movement to the left along a given aggregate-demand curve
b.	by shifting aggregate demand to the left
c.	by shifting aggregate supply to the left
d.	by a movement to the right along a given aggregate-demand curve

16. What happens to prices and output when the long-run aggregate-supply curve shifts right?

a.	Prices and output both increase.
b.	Prices and output both decrease.
c.	Prices increase and output decreases.
d.	Prices decrease and output increases.

17. How are the effects of an increase in the price level that is greater than expected shown in the aggregate demand and aggregate supply model?

a.	by shifting the short-run aggregate-supply curve right
b.	by shifting the short-run aggregate-supply curve left
c.	by moving to the right along a given aggregate-supply curve
d.	by moving to the left along a given aggregate-supply curve

18. Which of the following shifts the short-run aggregate supply to the right?

a.	an increase in the minimum wage
b.	an increase in immigration from abroad
c.	an increase in the price of oil
d.	an increase in the actual price level

Figure 14-1

19. Refer to the Figure 14-1. How would an adverse shift in aggregate supply move the economy?

a.	from A to B
b.	from C to D
c.	from B to A
d.	from D to C

Need help with questions, 15- 19, greatly appreciate.

Solutions

Expert Solution

a) "B"

Increase in the aggregate demand in the market will shift demand curve to the left i.e. people will be demanding less in the market at the given price.

b) "D"

The price in the market will decrease and the output in the market will increased. That will be due to increased resources in the economy that has caused a right ward shift in the LRAS.

c) "B"

That will be shown by a shift in the aggregate supply curve to the left, that will increase the price in the market and decrease the output.

d) "B"

An increase in the immigration from abroad will shift the SRAS to the right.

Rahul Sunny answered 1 year ago

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