32 I an economy A) shift SRAS to the right B) shit SRAS to the left C) shit AD t

Question

32 I an economy A) shift SRAS to the right B) shit SRAS to the left C) shit AD to the left D) shit AD to the right 33. Aroduction in interest rates premtes greater consumption and investment dat leads to e an increase in aggregate supply A) False B) Tue 34. (Figane: Shifts in Aggregate Demand) Starting at equilabrium point b, if imports inerease or consumer demand decreases, the demand curve will shift to -tus-- the real output LRAS SRAS, AD, AD Aggregate Output (Q) A) AD; increasing; increasing B) AD; increasing, decreasing C) ADs; decreasing; decreasing D) AD; increasing; decreasing A depreciation of the U.S. dollar against the Chinese yuan will ikely shift the U.S demand curve to the -, leading to output in the short run. A) right; lower B) left, lower right; higher ) left; higher

Explanation / Answer

32. If an economy is in recession , then expansionary fiscal policy by increasing government spending or reducing taxes would increase aggregate demand . Therefore, shift AD to the right. Option(D) is correct.

33. A reduction in interest rates promotes greater consumtption and investment that leads to an increase in aggregate supply . FALSE Because this leads to increase in aggregate demand.

34. Starting at equilibrium point b, if imports increase or consumer demand decreases , the demand curve will shift to AD2 because demand decreases thus decreasing the price level and decreasing the real output. Now, at equilibroum point a. Therefore, option(C) is correct.

35. A depreciation of the U.S dollar against the chinese yuan will likely shift the U.S aggregate demand curve to the right leading to higher output in the short run.Because when U.S dollar depreciates then net exports increases then , demand curve for U.S will shift to the right. Therefore, option(C) is correct.

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