14 Aug Due in 8 hours and need to be 3-4 pages long. ANSWER THE QUESTIONS BELOW to help form the paper
- What are supply shocks? Explain what effect adverse and favorable supply shocks have on the supply curve. Give an example of a supply shock that has affected the U.S. economy on more than one occasion.
- Briefly explain how a change in the personal income tax rate affects aggregate demand.
- True/False Statements. Indicate if the statement below is True or False. You must support your answer with a few sentences for each statement.
- When considering the aggregate demand curve, the wealth effect, interest rate effect and effects from international trade reinforce each other.
- Economic advisers who fear that the economy is growing too rapidly would recommend that the government decrease spending and/or increase taxes.
- An increase in government spending will shift the aggregate demand curve to the left.
- When federal government spending amounts to less than tax revenues, the federal government runs a budget deficit.
- YOU MAY USE THESE LINKS TO HELP
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Aggregate Demand, Supply, and Fiscal Policy, Interactive Tutorial. http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn=1269879944&id=11387
Aggregate Demand, Supply, and Fiscal Policy, Podcast. http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn=1269879944&id=11630
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