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Question 1 1.25 pts Instructions: Select the short-run changes and long-run changes on the following AD-AS diagram from the drop down list for each of the following situations. Assume the economy starts in long-run equilibrium and that the long-run changes also include the short-run changes. A) An increase in consumer confidence that leads to higher consumption spending. Short-run effects: [ Select ] Long-run effect: [ Select ] B) A reduction in taxes. Short-run effects: [ Select ] Long-run effect: [ Select ] C) An easing of monetary policy by the Fed (a downward shift in the policy reaction function). Short-run effects: [ Select ] Long-run effects: [ Select ] D) A sharp drop in oil prices (assume the change in oil prices is permanent and no policy actions are taken). Short-run effects: [ Select ] Long-run effects: [ Select ] E) A war that raises government purchases. Short-run effects: [ Select ] Long-run effects: [ Select ]

          Question 1
1.25 pts
Instructions: Select the short-run changes and long-run changes on the following AD-AS diagram from the drop down list for each of the following situations.
Assume the economy starts in long-run equilibrium and that the long-run changes also include the short-run changes.
A) An increase in consumer confidence that leads to higher consumption spending.
Short-run effects: [ Select ]
Long-run effect: [ Select ]
B) A reduction in taxes.
Short-run effects: [ Select ]
Long-run effect: [ Select ]
C) An easing of monetary policy by the Fed (a downward shift in the policy reaction function).
Short-run effects: [ Select ]
Long-run effects: [ Select ]
D) A sharp drop in oil prices (assume the change in oil prices is permanent and no policy actions are taken).
Short-run effects: [ Select ]
Long-run effects: [ Select ]
E) A war that raises government purchases.
Short-run effects: [ Select ]
Long-run effects: [ Select ]

Question 1
1.25 pts
Instructions: Select the short-run changes and long-run changes on the following AD-AS diagram from the drop down list for each of the following situations.
Assume the economy starts in long-run equilibrium and that the long-run changes also include the short-run changes.
A) An increase in consumer confidence that leads to higher consumption spending.
Short-run effects: [ Select ]
Long-run effect: [ Select ]
B) A reduction in taxes.
Short-run effects: [ Select ]
Long-run effect: [ Select ]
C) An easing of monetary policy by the Fed (a downward shift in the policy reaction function).
Short-run effects: [ Select ]
Long-run effects: [ Select ]
D) A sharp drop in oil prices (assume the change in oil prices is permanent and no policy actions are taken).
Short-run effects: [ Select ]
Long-run effects: [ Select ]
E) A war that raises government purchases.
Short-run effects: [ Select ]
Long-run effects: [ Select ]

Added by Snay

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