In figure 2. if aggregate supply decreases, then the price level. will rise will
ID: 1217783 • Letter: I
Question
In figure 2. if aggregate supply decreases, then the price level. will rise will fall will stay the same will rise, then fall none of the above In figure 2 if aggregate demand increases, then will rise will fall will stay the same will fall, then rise none of the above In figure 2 aggregate demand will increase if: the price level increases interest rates fall US exports fall all of the above none of the above In figure 2, aggregate supply will increase if technology gets better input prices fall tax rates fall all of the above none of the above In figure 2, if aggregate demand and supply increase, then real GDP falls real GDP rises the price level falls the price level rises none of the aboveExplanation / Answer
a. AS will shift leftward. When supply decreases, there is shortage in the economy and price rises to control demand. a. AD will shift to right. Demand will rise but supply is fixed so price will rise. b. When interest fall, people borrow more and demand more with this extra cash in hand. d Supply increases if cost of production falls b. A new equilibrium will be set at higher GDP