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Explain how each of the following events would affect the aggregate demand curve. a.Lower interest rates b.A decrease in net exports c.A decrease in the price level d.Slower income growth in other countries e.A decrease in imports _____________________________________________________________________________________________ _____________________________________________________________________________________________

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a.Lower interest rates would increase in...

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Changes in the price level


A) increase the level of aggregate supply in the long run.
B) decrease the level of aggregate supply in the long run.
C) do not affect the level of aggregate supply in the long run.
D) increase the level of aggregate supply in the long run only at very high levels of output.

E) None of the above
F) A) and D)

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List and explain the three reasons the aggregate demand curve slopes downward. _____________________________________________________________________________________________ _____________________________________________________________________________________________

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The three reasons are the wealth effect,...

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The Australian federal government lowered personal income taxes numerous times throughout the 2000s.Explain how this policy affected the aggregate demand curve. _____________________________________________________________________________________________ _____________________________________________________________________________________________

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Lowering income taxes increases the amou...

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How does an increase in the price level in Australia relative to the price level of other countries affect the aggregate demand curve,ceteris paribus?


A) This will move the economy up along a stationary aggregate demand curve.
B) This will move the economy down along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the left.
D) This will shift the aggregate demand curve to the right.

E) B) and D)
F) B) and C)

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An increase in aggregate demand causes an increase in ________ only in the short run,but causes an increase in ________ in both the short run and the long run.


A) the price level; real GDP
B) real GDP; real GDP
C) the price level; the price level
D) real GDP; the price level

E) All of the above
F) A) and D)

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