Briefly explain whether each of the following shifts the aggregate demand curve to the right or...

Briefly explain whether each of the following shifts the aggregate demand curve to the right or to the left. Briefly explain your responses

The Federal Reserve sells $10 billion of US Treasury securities.
The federal government launches a massive program to rebuild the country’s highways.
The dollar appreciates relative to the currencies of its major trading partners.

Solutions

Expert Solution

a. Federal Reserve sells $10 billion of US treasury securities

In this case, the demand will be decrease and will go right, as there will be less supply of money. When the bank sold the securities, the money from the market goes into the hands of the reserves. In some of the cases, the reserve do this in order to tackle inflation and with high liquiditiy.

b. The federal government launches a massive program to rebuild the country's highways.

IN this case, the demand will increase and will go left, as there will be increase the efficient movement of goods and logistics. Which will directly increase the demand.

c. The dollar appreciates relative to the currencies of its major trading partners.

In this case, the demand will decrease and will go right, as the cost of the goods will increase in case of import. And the trading countires will incurr high cost and will decrease the demand of the goods.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Explain whether each of the following events shifts the aggregate-demand curve. For each event that does...

Explain whether each of the following events shifts the aggregate-demand curve. For each event that does shift AD curve explain the short-run effects on output and the price level (note: use AD-SRAS diagrams). a) (5 points) Government conducts expansionary fiscal policy. b) (5 points) Central bank increases money supply. c) (10 points) Central bank increases money supply, while government increases taxes.

State and Local Governments and Aggregate Demand. The aggregate demand curve shifts to the right if...

State and Local Governments and Aggregate Demand. The aggregate demand curve shifts to the right if A. the money supply decreases B. the price level increases C. taxes increase D. state governments increase their spending

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate...

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate demand curve, both, or neither. For each event that does shift a curve draw a diagram to illustrate the effect on the economy (you don’t have to send me the graphs, but you should draw them on scratch paper for practice). Households decide to save a larger share of their income. Florida orange groves suffer a prolonged period of below-freezing temperatures. Increased job opportunities...

If the aggregate supply curve shifts to the right, the __curve shifts to the _....

If the aggregate supply curve shifts to the right, the ________ curve shifts to the _______.Multiple Choice:aggregate demandleft Phillipsleft aggregate demand rightPhillips; right

the aggregate demand curve shifts in when?

Which of the following shifts aggregate demand to the right? a. a decrease in the money...

Which of the following shifts aggregate demand to the right? a. a decrease in the money supply b. a decrease in net exports at every exchange rate c. a decrease in prices d. a decrease in taxes

An increase in investment creates a in aggregate demand, the aggregate demand curve shifts...

An increase in investment creates a ______ ______ in aggregate demand, the aggregate demand curve shifts ________ potentially brining ________ phase of the business cycle. larger; increase; rightward; expansion larger; decreases; leftward; recession smaller; increases; rightward; expansion smaller; decreases; leftward; recession

11. Explain whether each of the following events and policies will affect the aggregate demand curve...

11. Explain whether each of the following events and policies will affect the aggregate demand curve or the short?run aggregate supply curve, and state what will happen to the price level and real GDP. a) Oil prices rise b) The Fed sells bonds c) Government purchases increase d) Federal taxes increase e) The government slashes transfer payment spending f) Oil prices fall. To the Tutor: Please be clear and explanatory. Will be appreciated. Thank you.

10. The long-run aggregate supply curve shifts right if

10. The long-run aggregate supply curve shifts right if a. Immigration from abroad increases b. The capital stock increases c. Technology advances d. All of the above are correct 11. Which of the following would cause prices to decrease and real GDP to increase in the short run? a. Short-run aggregate supply shifts right. b. Short-run aggregate supply shifts left. c. Aggregate demand shifts right. d. Aggregate demand shifts left. 12. Which of the following is not a reason the New York Federal Reserve Bank president always gets to vote at...

Determine whether each of the following would cause a shift of the aggregate demand curve, a...

Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, a shift in neither curve, or a shift in both curves. If a shift is caused, indicate which curve shifts, and in which direction it shifts. What happens to aggregate output and the price level in each case? 1] The price level changes. 2] Consumer confidence increases. 3] The supply of resources decreases. 4] The wage rate decreases.

Subjects