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4. Determinants of aggregate demandThe following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1to AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion.The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand.DeterminantChange Needed to Decrease Aggregate DemandConsumer Confidence ________________Government Purchases ________________Interest Rates Increase ________________Incomes in Other Countries _______________ |
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Answer» Answer: 4. Determinants of AGGREGATE demand The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1 to AD2 , causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. The following table lists several determinants of aggregate demand. Complete the table by indicating the CHANGE needed in each determinant to decrease aggregate demand. Determinant Change Needed to Decrease Aggregate Demand Consumer CONFIDENCE ________________ Government PURCHASES ________________ Interest Rates INCREASE ________________ Incomes in Other Countries _______________ |
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