Equilibrium price level and the level of real output

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What effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output. Assume all other things remain constant.

A. A widespread fear of depression on the part of consumers.

B. A $2 increase in the excise tax on a pack of cigarettes.

C. A reduction in interest rates at each price level.

D. A major increase in Federal spending for health care.

E. The expectation of rapid inflation.

F. The complete disintegration of OPEC, causing oil prices to fall by one-half.

G. A 10 percent reduction in personal income tax rates.

H. A sizable increase in labor productivity (with no change in nominal wages).

I. A 12 percent increase in nominal wages (with no change in productivity).

J. Depreciation in the international value of the dollar.

Reference no: EM13733571

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