Question

1. Let’s say the AD/AS equilibrium is at full employment, and then the aggregate demand curve moves to the left: (all answers “up” or “down”; and assume prices are not sticky)
2. What happens to the amount of U.S. imports and exports when prices in the U.S. go up.
3. List and explain two of the reasons that investment spending is so much more volatile than consumption spending.
4. Let’s say the AD/AS equilibrium is at full employment, and then the aggregate demand curve moves to the left: (all answers “up” or “down”; and assume prices are not sticky)

5. Output goes:

   Prices go:  

   Unemployment goes:

Answer 1

The U.S imports wil UP and exports will down = when prices in the U.S go up .

The investment spending is so much more volatile than consumption spending because investment spending is an optional thing than a consumption .most consumption ( but not all ) are necessary and cannot be put off in the economic downturn but in contrast investment is optional and can be put off while.

investment is more like to be related to interest rate . and thats why it is more volatile when the economy is in recession or in booming.

3) Output goes = down

price go = UP.

unemployment goes = UP.