The profitability of producing goods and services at any given price level would increase. The short-run aggregate-supply curve would shift to the left. fall rise If aggregate demand is held constant, the shift in the aggregate-supply curve will cause the price level to and the quantity of output produced to
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Assume the economy is operating in a horizontal range of the aggregate supply curve. This fall in investment would cause a multiple choice rightward shift of aggregate demand and an increase in output equal to the rightward shift in aggregate demand. leftward shift of aggregate demand and a fall in output equal to the leftward shift in aggregate demand. upward shift of aggregate supply and a fall in the price level equal to the upward shift in aggregate supply. downward shift of aggregate supply and a fall in the price level equal to the downward shift in aggregate supply.
Rashmi S.
Question: If tastes increase and taxes decrease, please illustrate the direction or movement of the supply and demand curves and state whether the prices will increase, decrease, or remain at the same level and state whether quantity will increase, decrease, or remain at the same level. Answer Given: With increased tastes for goods and services, there will be a relative increase in the demand for the same. Consequently, a reduction in the price of the same commodities will cause a reduction in their prices. This will boost the purchasing power of the consumers, thus increasing the demand significantly. The supply curve and the demand curve will both shift to the right due to favorable factors of production and reduced prices. This answer seems confusing. It seems to reference price being a cause of reducing price. Also, is it the decrease in taxes that's increasing the buying power of the consumer? Also, if both curves move to the right, wouldn't price remain the same and quantity go up unless the supply curve is moving to the right but the demand curve is moving even further to the right?
Manasvee S.
Cost-push inflation occurs when the: aggregates demand curve shifts leftward while the aggregate supply curve is fixed. aggregate demand curve shifts rightward while the aggregate supply curve is fixed. aggregate supply curve shifts rightward. aggregate supply curve shifts leftward while the aggregate demand curve is fixed.
Haricharan G.
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