Select one:a. When aggregate demand is at AD3b. When aggregate demand is at AD2c. When aggregate demand is at AD1d. The multiplier will be the same size no matter what Aggregate Demand ise.The multiplier will be one no matter what aggregate demand is Price Level AD1 AS AD2 AD3 GDP
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- Refer to the dlagram glven below. Consumption Income The diagram given above shows consumptlon schedules. As Income rises, the marginal propensity to consume remains constant for. Multiple Cholce only C3- O only C. C2, ano C3. none of the consumption schedules. Drov 17ot 72 NextWould an increase in federal spending on the space program generate a multiplier effect on the U.S. economy? What impact would the additional spending have in Houston, Huntsville, Florida's, Space Coast, and similar areas with a heavy concentration of space facilities? What impact would higher taxes to finance the additional spending have in other areas of the country?1. What would happen to multiplier if investment were to be positively related to income? 2. is it possible for total saving to fall when people beome more thirfty? 3. What is meant by multiplier?Why shoul the value of multiplier rise when people spend more on consumption?
- Aggregate Expenditures 800 600 400 200 0 15 04 Income Refer to the above graph to answer this question. What is the value of the multiplier in this economy? 200 400 600 800 1000 167 A AE 02 O Cannot be determined.Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.As the multiplier process is working on the demand side, a. firms will meet the additional demand without raising prices. b. firms will not meet the additional demand. c. firms will meet the additional demand only by raising prices. d. the multiplier process will cease creating demand
- please explain this dynamic multiplier graph that givenIllustrate and interpretthe short-run andlong-run aggregatesupply curvesExplain why the following statements are false.a. “The aggregate-demand curve slopes downwardbecause it is the horizontal sum of the demandcurves for individual goods.”b. “The long-run aggregate-supply curve is verticalbecause economic forces do not affect long-runaggregate supply.”
- A. Suppose that the economy is characterized by the following behavioral equations: • • C = 160+ 0.6 Yd I = 150 • G = 150 • T = 100 a) Identify or solve the following: • C1 • (1-C₁) . Y • Ya . C • multiplier • A . Z • Sprivate • Spublic b) If the government decides to decrease its spending by 40, ceteris paribus, identify or solve the following: C₁ • (1-C₁) . Y • Yd • C • multiplier . A . Z • Sprivate • SpublicDefine and Derive Multiplier and Accelerator.Study the graph below. When will the multiplier be biggest? Price Level AD1 AS AD3 AD2 GDP Select one: a. When aggregate demand is at AD3 b. When aggregate demand is at AD2 c. When aggregate demand is at AD1 d. The multiplier will be the same size no matter what Aggregate Demand is ○ e. The multiplier will be one no matter what aggregate demand is