4 points Suppose a decrease in consumer confidence has caused aggregate demand to shift from AD to ADq. AD and AS Model 200 180 160 140 120 100 Price Level 80 60 40 20 20 40 60 80 100120 140160 180 200 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number, include a minus sign. a. By what amount has aggregate demand changed? % billion I a. By what amount has aggregate demand changed? $ billion polnts b. If the marginal propensity to consume is 0.80, what is the expenditures multiplier? c. By how much will investment demand need to change in order to restore the economy to long-run equilibrium? $ billion Investment Demand Curve Interest Rate (percent) =R W B e @D D =W o 4 8 12 16 20 24 28 32 Quantity of Investment (billions of dollars) 4 d. For investment demand to change by the necessary amount, the Fed would need to cause interest rates to move from 10% to what 2 percent? points % Money Market MS Interest Rate (percent) MD O 10 20 30 40 50 60 70 80 90 100 Money (billions of dollars)e. By how much would the Fed need to adjust the money supply in order to reach the desired interest rate? % billion f Suppose the reserve requirement in the economy is 20%. What type of open market operation should the Fed conduct? In what quantity? Open market purchase | @ of $ billion in bends