Question: Please help me determine the effect on the short-run aggregate demand (AD) curve for each of the following scenarios; sketch a graph to illustrate each
Please help me determine the effect on the short-run aggregate demand (AD) curve for each of the following scenarios; sketch a graph to illustrate each answer for visibility:
1. A decrease in consumer wealth is due to a plunge in stock prices. 2. Households and businesses have more optimistic expectations regarding future economic performance. 3. There are higher levels of investment spending by businesses. 4. The government cuts taxes for households and businesses. 5. The Fed decreases the money supply.
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