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Assignment 3 (Chapter 5) 1. Starting from full-employment equilibrium indicate whether each of the following factors will affect aggregate demand (AD) or aggregate supply (AS)

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Assignment 3 (Chapter 5) 1. Starting from full-employment equilibrium indicate whether each of the following factors will affect aggregate demand (AD) or aggregate supply (AS) and whether the effect would be an increase or a decrease. Then, indicate what will happen to the price level and the level of real GDP and what type of equilibrium will result. a. A decrease in interest rates. (Click to select) would (Click to select) ; Price level would (Click to select) Real GDP would (Click to select) resulting in a(n) | (Click to select ) gap. b. An improvement in technology. (Click to select) would (Click to select) ; Price level would (Click to select) Real GDP would | (Click to select) resulting in a(n) (Click to select) gap. c. An increase in the exchange rate. (Click to select) would (Click to select) ; Price level would (Click to select) Real GDP would (Click to select) resulting in a(n) | (Click to select ) gap. d. A decrease in government spending. (Click to select) would (Click to select) ; Price level would | (Click to select) Real GDP would I (Click to select) resulting in a(n) I (Click to select) gap. e. An increase in the money supply. (Click to select) I would (Click to select) ; Price level would | (Click to select) Real GDP would (Click to select) resulting in a(n) I (Click to select) gap. f. An increase in the nominal wage rate (Click to select) would (Click to select ) ; Price level would | (Click to select) Real GDP would (Click to select) resulting in a(n) I (Click to select) gap

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