Question

4. Determinants of aggregate demand
The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1
to AD2
, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion.

The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand.
Determinant

Change Needed to Decrease Aggregate Demand
Consumer Confidence ________________
Government Purchases ________________
Interest Rates Increase ________________
Incomes in Other Countries _______________

Answer 1

Answer:

4. Determinants of aggregate demand

The following graph shows a decrease in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1

to AD2

, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion.

The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to decrease aggregate demand.

Determinant

Change Needed to Decrease Aggregate Demand

Consumer Confidence ________________

Government Purchases ________________

Interest Rates Increase ________________

Incomes in Other Countries _______________