1 For each of the following economic conditions, place an X in the table to indicate the appropriate range of the Aggregate Supply Curve Condition Keynesian Intermediate Classical The nation is suffering through a severe recession The nation's factories are running at capacity RGDP and inflation are both growing at a moderate pace The central bank is implementing contractionary monetary policies to reduce high inflation A mid-point in the business cycle expansion phase GDP is expanded but prices remain unchanged Increasing job growth is accompanied by moderate inflation2. Many exogenous factors can cause a shift in the Aggregate Supply Curve. For each of the following factors, place an X in the table to indicate how the AS curve would shift Factor AS shifts left AS shifts (decrease in right AS) (increase in AS) World oil prices fall as technology increases oil production Environmental Protection Agency increases restrictions on industrial pollution Business taxes are reduced Improved batteries allow for widespread adoption of highly efficient electric motors Pandemic spreads across the world New comprehensive immigration legislation increases immigration Federal minimum wage is increased by 30%3. Aggregate Demand comprises 4 components: Consumption (C), Investment (1), Government spending (G), and Net Exports (NE). An exogenous factor that increases any of the components will also increase Aggregate Demand. For each of the following, place an X to indicate the one component most directly affected (consider only the primary effect) and an L (decrease) or an F (increase) to show whether the AD curve shifts Left or Right. Factor C G NE L or R Firms reduce capital expenditures in anticipation of an imminent recession Existing house prices rise Foreign GDP falls as world enters recession Congress increases spending for the current fiscal year Tariffs are imposed by many foreign countries to protect their domestic employment The US Import/Export bank reinstates guarantees for loans to foreign airlines to purchase Boeing aircraft Congress enacts tax incentives for firms purchasing new equipment and facilities Federal Reserve enacts policies to reduce credit card interest ratesFor each of the following government economic actions, place an X in the table to indicate whether the action is scal or monetary policy. Action Monetary Fiscal The federal government reduces home mortgage guarantees The central bank sells mortgagebacked securities (MES) The US Treasuryr borrows money to nance increased government spending Congress reduces eligibility for Medicaid The central bank gradually increases the federal funds interest rate Federal income taxes are reduced