Answer to Question #14199 in Macroeconomics for marchelle

Question

What effects would each of the following have on aggregate demand or aggregate supply?
A) a widespread fera of depression on the part of the consumer.
B) an N$ increase in the excise tax on a pack of cigarettes.
C) a reduction in the interest rate at each price level.
D) the expectation of rapid inflation.

Answer 1

A)& AD curve left, output down and price level down
B) AD curve left,Price up
C) AS increase, Price increase
D) AD curve right, price level up