Answer to Question #15070 in Macroeconomics for zalfa

Question

What effects would each of the following have on aggregate demand or aggregate supply?
a)The Central Bank within the economy lifts interest rates.
(b)There is an increase in private domestic investment spending.
(c)An increase in international oil prices.
(d)An appreciation in the foreign exchange rate value of the economy’s currency.
(e)A fall in real estate prices in the capital cities of the country (hint: think of the effect upon one’s wealth level)
(f)The country main exports fall in price while the goods the country imports from abroad rise in price

Answer 1

(a)The Central Bank within the economy lifts interest rates.
(b) Increase of Aggregate Demand
(c)Decrease of Aggregate Demand due to Price increases
(d) Increase of Aggregate Supply &
(e) Increase of Aggregate Demand
(f)Decrease of Aggregate Supply &