exam 3 shifts and movements

exam 3 shifts and movements - Downward • Lower final...

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Aggregate demand curve o Shifts Rightward Optimistic expectations Rise in wealth Small stock of physical capital Cut taxes (fiscal) Increase govt spending (fiscal) Bank increases money (monetary) Leftward Rise in interest rate Pessimistic expectations Falls in wealth Large stock of physical capital Raises taxes (fiscal) Cut govt spending (fiscal) Bank reduces money (monetary) o Movements Upward Higher final goods/service price
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Unformatted text preview: Downward • Lower final goods/service price • Aggregate supply curve o Shifts Short run aggregate supply increases…rightward • Commodity prices fall • Nominal wages fall • Workers become more productive Short run aggregate supply decreases… leftward • Commodity prices rise • Nominal wages rise • Workers become less productive o Movements Upward • Rise in CPI •...
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