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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
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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 effect would a decrease in production costs for all firms have on the aggregate supply curve?
the curve would shift to the right
An increase in supply will cause?
An increase in supply will cause a decrease in demand. The value of what is being supplied would also drop.
Would cause a decrease in the supply of money?
raising of interest rates
Which answer would cause an ''increase in supply'' for computers?
Decrease in computer resources cost.
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 effect would a decrease in production costs for all firms have on the aggregate supply curve?
the curve would shift to the right
Which answer would cause a ''decrease in quantity supply'' for Fuzzy Wuzzies?
Decrease in the price of Fuzzy Wuzzy.
An increase in supply will cause?
An increase in supply will cause a decrease in demand. The value of what is being supplied would also drop.
Would cause a decrease in the supply of money?
raising of interest rates
Which answer would cause an ''increase in supply'' for computers?
Decrease in computer resources cost.
Which answer would cause a ''decrease in supply'' for computers?
Producers expectation of a computer prince increase.
Which situation would cause an increase in the overall supply of books?
An example would be a decrease in the price of book binding glue.
Which direction would the supply curve shift if there was a decrease in supply?
leftward
Which factor would most likely cause the supply of a company's product to decrease?
The company decides to go into a different line of business.
What will happen to the equilibrium price level and real GDP if aggregate demand and aggregate supply both decrease?
Keynesian model- where AS is upward sloping, GDP will decrease and inflation will either increase or decrease, this depends on which decrease is larger.. Neo classical- GDP will remain the same and price level decreases. The first answer is the one you would use in a class. Try drawing them out and seeing what happens, shift both curves to the left, put Y(GDP) on the x axis and Inflation(Price level) on the y axis.
What if Banks decide to keep more of their assets as reserves in order to avoid risking a shortage of the required reserve?
It would NOT shrink the money supply, it would just cause the supply of money to grow at a slower pace. So it would decrease the rate of growth of the money supply.
