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What effect would a decrease in production costs for all firms have on the aggregate supply curve?
the curve would 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 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
When demand rises and supply remains the same equilibrium price will... and equilibrium quantity will?
If aggregate demand rises and aggregate supply remains the same, the quantity supplied which increase. Consequently, the equilibrium price will increase, as will the equilibrium quantity. LOOK AT LINK BELOW: http://upload.wikimedia.org/wikipedia/en/thumb/e/eb/Supply-demand-right-shift-demand.svg/240px-Supply-demand-right-shift-demand.svg.png As you can see, if demand increased from D1 to D2, the price level would increase from P1 to P2, and the output would increase from Q1 to Q2. Hope this helps!
Which direction would the supply curve shift if there was a decrease in supply?
leftward
What effect would a decrease in production costs for all firms have on the aggregate supply curve?
the curve would 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 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
When demand rises and supply remains the same equilibrium price will... and equilibrium quantity will?
If aggregate demand rises and aggregate supply remains the same, the quantity supplied which increase. Consequently, the equilibrium price will increase, as will the equilibrium quantity. LOOK AT LINK BELOW: http://upload.wikimedia.org/wikipedia/en/thumb/e/eb/Supply-demand-right-shift-demand.svg/240px-Supply-demand-right-shift-demand.svg.png As you can see, if demand increased from D1 to D2, the price level would increase from P1 to P2, and the output would increase from Q1 to Q2. Hope this helps!
Why would an expansionary gap lead to a change in inflation Why would a recessionary gap lead to a change in inflation?
Assuming that the aggregate demand curve does not move, the only way for the gap to be closed is by a shift in aggregate supply. These gaps cause a change in inflation expectations, moving the AS curve left (exp) or right (rec) back to long term equilibrium and changing the inflation rate.
Which direction would the supply curve shift if there was a decrease in supply?
leftward
How would a rise in business affect the aggregate demand curve?
The aggregate demand curve shifts to the right
What events would cause a shift to the right in the supply curve?
Upgrades to its mixing equipment allow the plant to make more bars.
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
What does it mean when the supply curve shifts to the right?
A shift in a demand or supply curve occurs when a good's quantity demanded or supplied changes even though price remains the same. So a shift to the right would mean the good quantity suppled has increased even the the price is still the same.
Will An increase in the price of steel will shift the supply of cars to the right?
No, an increase in the price of steel will not shift the supply of cars to the right; rather, it will likely shift the supply curve to the left. This is because steel is a key input in car manufacturing, and higher steel prices increase production costs for car manufacturers, leading to a decrease in the quantity of cars supplied at any given price. Consequently, the overall supply of cars in the market would decrease, not increase.
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.
