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it doesn't. it raises AD because business now have higher profit margin and so produce more which means they hire more workers and more money ends up in workers' collective pockets which means AD shifts right.
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∙ 12y ago
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A decrease in government spending will cause a?
decrease in aggregate demand
Does increasing taxes decrease aggregate demand?
cause of incresing and decresing the Determinants of aggregate?
Because tax cuts will likely affect both aggregate demand and aggregate supply does it matter which is affected more?
Because a tax increase will cause consumption to decrease, an aggregate demand has a greater effect.
What would cause an increase in aggregate demand in the short run?
if decrease a price or if the expectation of raising a price
What would cause a decrease in aggregate supply?
Aggregate supply is the supply of all goods and services within a country. Which of the following would most likely cause a decrease in the aggregate supply
Cause the aggregate demand curve to shift outward?
Real shocks will determine the direction of the long-run aggregate demand curve. A real shock is an event or certain factors that cause more or less production. A war, for instance will halt factories from producing goods and will cause the aggregate demand curve to shift left. Higher production will lead to an outward shift to the right.
What would cause the aggregate demand curve to shift to the right?
The aggregate demand curve will shift to the right as the economy expands. When that happens, the quantity of output demanded for a given price level rises.
What is the factors that may cause the decrease in ice-cream?
what is the factors that may cause a decrease in the demand of ice-cream
A price decrease will cause total revenue to fall if?
demand is inelastic
What will cause the capital stock when it increases?
Increases in the stock of capital will cause which of the following?The demand of labor increases.The demand of labor decreases.Selected answer No change in the demand of labor.First increase then decrease the demand of labor
Increased consumer spending will usually cause?
In the short run increased consumer spending causes an increase in Aggregate Demand and therefore an increase in both Real Gross Domestic Product and Price Levels. Also this generally means; inflation, decrease in unemployment, and growth, these can vary however, depending on where on the Aggregate Supply curve the AD curve is.
Which would cause an increase in the demand for production A?
A decrease in the price of a complementary product B.
