Ch11answers - CHAPTER 11 AGGREGATE SUPPLY AND DEMAND...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
AGGREGATE SUPPLY AND DEMAND PROBLEMS 1. Illustrate these events with AS and AD shifts: a. Government increases defense spending. b. The Headline story on p. 263. c. Imported raw materials get cheaper. d. Congress cuts corporate income tax. a. An increase in government spending would shift AD from AD A to AD B. b. The Headline story on p. 263 would result in a shift from AD B to AD A . A decline in wealth results in shifting AD from AD B to AD A. c. Imported raw materials are a factor of production and thus affect AS. A decrease in the price of imported raw materials will result in shifting AS from AS A to AS B. d. A cut in corporate income taxes is a supply side cut and would result in shifting AS from AS A to AS B . CHAPTER 11 AS A AS B AD B AD A Real Output Price Level
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Based on the Headline on p. 264: a. Illustrate the AS shift that occurs. b. Identify the old (E o ) and the new (E 1 ) macro equilibrium. c. What macro ailments result?
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern