Please need help its due tomorrow night and thank you!! The picture are a blurry

Question

Please need help its due tomorrow night and thank you!! The picture are a blurry so I will type them here. 1.) Make a list of things that would shift the aggregate demand curve to the right 2.) Make a list of expenditures whose sum equals GDP 3.) Keynes thought that the behavior of the economy in the short run was influenced by what he called "animal spirits." By this he meant that business people sometimes felt good about the economy and carried out lots of investment and at other times felt bad about the economy and so cut back on their investment spending. Explain how such fluctuations in investment would lead to fluctuations is real GDP and prices. 4.) Make a list of things that would shift the long-run aggregate supply curve to the right QUESTION 1 Make a list of things that would shift the aggregate demand curve to the right T T | Paragraph M Arial M 3 (12pt) I-. I-. T Path QUESTION 2 Make a list of expenditures whose sum equals GDP 1·-·-. T-2-e T T | Paragraph Arial M 3 (12pt)

Explanation / Answer

1) Aggregate Demand is the total demand for a country’s output, including demand for consumption, investment , government expenses and net export, so Y = C + I + G + NX, this determines the Aggregate demand, any of these factors changes will change the aggregate demand.

Now below factor will shift the Aggregate demand curve to right,

a) Government Increases spending and decreases Taxes

b) Central bank (Fed reserve) increases money supply and lowers the interest rate

c) More export because of good economic condition

d) Expectation of households and firms are high for future

e) More investments in the country

2) GDP = Consumption + Investment + Government Expenses + Net Export

So sum of Consumption, Investment, Government Expenses, and Net Export is GDP

3) As we know the Investment is part of GDP (GDP = Consumption + Investment + Government Expenses + Net Export) any change in investment will change the GDP.

When business people sometimes felt good about the economy and carried out lots of investment, it helps in shifting the Aggregate demand curve to right. When Aggregate demand curve shift to right, the Real GDP and the price level rises. Similarly, when they felt bad about the economy and cut back on their investment spending, the Aggregate demand curve to left. When Aggregate demand curve shift to left, the Real GDP and the price level decreases. So the fluctuation in Investment leads to fluctuation in Real GDP and prices.

4) Aggregate supply is the total supply of the country. Below factors will shift the aggregate supply curve to right.

a) Decrease in Wages

b) Decrease in price of critical inputs such as Oil, natural gas etc.

c) Increase in productivity due to advances in technology

d) Increase in labor forces because of immigration

e) Increase in capital stock

5) During recession, along with GDP below variables will also decrease.

Consumption, Investment, employment, Real incomes, sales, Industrial output etc.

As per definition, GDP = Consumption + Investment + Government Expenses + Net Export

So if GDP falls then these factors should also fall.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.