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When aggregate demand exceeds aggregate supply which of these is MOST likely to result?
A budgetary surplus
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.
An increase in aggregate demand is most likely to be caused by a decrease in?
The tax rates on household income.
An increase in government spending on health care is likely to shift the?
Aggregate demand curve to the right. Stay Golden
What would most likely increase aggregate demand?
Aggregate demand is likely to increase through expansionary fiscal policies, such as increased government spending or tax cuts, which boost consumer and business spending. Additionally, lower interest rates set by central banks can encourage borrowing and spending by consumers and businesses. An increase in consumer confidence and rising exports due to a weaker currency can also contribute to higher aggregate demand.
When aggregate demand exceeds aggregate supply which of these is MOST likely to result?
A budgetary surplus
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.
An increase in aggregate demand is most likely to be caused by a decrease in?
The tax rates on household income.
An increase in government spending on health care is likely to shift the?
Aggregate demand curve to the right. Stay Golden
What happens to GDP when aggregate supply or demand change?
When aggregate demand increases, GDP typically rises as businesses respond to higher consumer spending by producing more goods and services. Conversely, if aggregate supply increases, GDP can also rise, leading to economic growth without necessarily causing inflation. However, if aggregate demand decreases while aggregate supply remains unchanged, GDP will likely fall, indicating a contraction in economic activity. Overall, changes in either aggregate supply or demand can significantly impact GDP, influencing economic performance and stability.
What is the relationship between inflation and ocr?
As the OCR increases it is highly likely that banks will increase their retail interest rates. As they do this borrowing will become relatively more expensive so there will be more incentive to save. So consumption a component of Aggregate demand will decrease causing aggregate demand to decrease which will than decrease Demand pull inflation
What effect would a reduction in person income tax have on aggregate demand or aggregate supply?
A reduction in personal income tax would likely increase aggregate demand, as individuals would have more disposable income to spend on goods and services. This increase in consumer spending can stimulate economic growth and boost overall demand in the economy. However, it may have less direct effect on aggregate supply, as supply is more influenced by factors like production capacity and resource availability. In the short term, the primary impact would be on demand, potentially leading to higher economic activity and increased employment.
In which situation is a forest most likely to be sustainable?
A forest is most likely to be sustainable when it is managed using sustainable logging practices, has diverse ecosystems, is protected from deforestation and degradation, and involves local communities in conservation efforts.
What is the relationship between money and inflation?
There is nearly a perfect, 1:1 relationship between inflation and the money supply. Generally, printing more money is the source of inflation.
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
What happens when interest rates increase?
well, it does two things to inflation. Firstly it increases the costs of production of firms therefore shifting Aggregate supply inwards (thereby increasing cost push inflation). It also shifts aggregate demand inwards because firms and households are less likely to want to borrow money in the case for consumption and investment because it increases their costs (this particularly affects the housing market and other big ticket items). This reduces the effects of demand pull inflation. So it shifts aggregate supply and aggregate demand inwards. When AS shifts inwards inflation increases. When AD shifts inwards inflation decreases. So the government would have to decide what the best policy is to do. Generally the shift inwards in AD will have a bigger effect on inflation (especially because the decrease in consumption which accounts for 60% of AD will hit consumers more - in mortgages) and also the effect will be maximised if the part of the AS curve is inelastic meaning an almost vertical drop in the general price level.
When potential evapotranspiration exceeds precipitation what is likely to happen to moisture storage?
When potential evapotranspiration exceeds precipitation, moisture storage is likely to decrease. This is because the demand for water through evaporation and transpiration surpasses the supply from precipitation, leading to a net loss of moisture in the soil and surrounding environment. As a result, soil moisture levels may decline, potentially affecting plant growth and ecosystem health. If this condition persists, it could lead to drought conditions in the affected area.
