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Use the short-run time horizon in the aggregate supply and demand framework to predict how the following events will affect the equilibrium price level and
Use the short-run time horizon in the aggregate supply and demand framework to predict how the following events will affect the equilibrium price level and RGDP. Identify which curve(s) shift and the direction in your answer. Include price level and RGDP in your response (increase, decrease, or indeterminate). (20 points). a. A conflict between two countries causes consumer confidence to plummet in the United States. (2 points). b. The Fed increases interest rates. (2 points). c. The US dollar appreciates significantly. (2 points). d. The labor force participation rate has increased significantly in the United States. (2 points). e. There is a decrease in worker productivity because of the quiet quitting phenomenon. (2 points). f. Nominal wages increase. (2 points). g. The price of gasoline decreases. (2 points). h. Business investment slows. (2 points) i. Government spending decreases. (2 points). j. The stock market drops significantly. (2 points)
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