Explain the effect, if any, that each of the following occurrences should have on the aggregate demand
Question:
Explain the effect, if any, that each of the following occurrences should have on the aggregate demand curve.
a. The Fed raises the discount rate.
b. The price level increases.
c. The federal government decreases federal income tax rates in an effort to stimulate the economy.
d. Optimistic firms increase investment spending.
e. The inflation rate rises by 6 percent.
f. The federal government decreases purchases in an effort to reduce the federal deficit.
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a A higher discount rate will decrease bank borrowing and lending The decr...View the full answer
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Related Book For
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
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