Reference no: EM13881574

Aggregate Demand and Aggregate Supply (Graded

Go to the BEA website www.bea.gov. On the left tab under Publications, go to the Interactive Data Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine all four components of GDP (C, I, G, and Xn. Which of these four components of AD declined the most during the 2007 and 2009 recession? Do you think an increase in government's spending (G can boost the Aggregate Demand (AD in a recession? Analyze why the economy may operate below full-employment GDP in the short run. How can the multiplier have a negative effect? What is the relationship between the multiplier and the marginal propensities? Explain.

 Fiscal policy refers to the

Suppose that the economy is in the midst of a recession. Which of the following policies would most likely end the recession and stimulate output growth?

The crowding-out effect of expansionary fiscal policy suggests that

Which of the following would not shift the aggregate supply curve?

Other things equal, a reduction in personal and business taxes can be expected to

The MPC can be defined as that fraction of a Dissaving means

 Refer to the graph. Which of the following factors will shift AD1 to AD3?

 The multiplier is

 The American Recovery and Reinvestment Act of 2009 was implemented primarily to

 What effect would each of the following have on aggregate demand or aggregate

 Why do some economists believe that tax cuts are critical to help revive an economy experiencing a recession?

  Expansionary fiscal policy is so named because it

 An economist who favors smaller government would recommend

 The lag between the time and the need for fiscal action is recognized and the time the action is taken is referred to as the

 The determinants of aggregate supply  Other things equal, a reduction in personal and business taxes can be expected to

 The MPC can be defined as that fraction of a

 The size of the MPC is assumed to be

 Refer to the graph. Which of the following factors will shift AD1 to AD3?

 The multiplier can be calculated as:

 The American Recovery and Reinvestment Act of 2009

 What effect would each of the following have on aggregate demand or aggregate supply? Explain. a. A reduction in personal income

tax. b. An increase in payroll taxes paid by the employer

 Why do some economists believe that tax cuts are critical to help revive an economy experiencing a recession?