Use an aggregate demand and aggregate supply dia- gram to illustrate and explain how each of...

 

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Use an aggregate demand and aggregate supply dia- gram to illustrate and explain how each of the following will affect the equilibrium price level and real GDP: a. Consumers expect a recession. b. Foreign income rises. c. Foreign price levels fall. d. Government spending increases. e. Workers expect higher future inflation and negotiate higher wages now. f. Technological improvements increase productivity. Use an aggregate demand and aggregate supply dia- gram to illustrate and explain how each of the following will affect the equilibrium price level and real GDP: a. Consumers expect a recession. b. Foreign income rises. c. Foreign price levels fall. d. Government spending increases. e. Workers expect higher future inflation and negotiate higher wages now. f. Technological improvements increase productivity.

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a Consumers expect a recession When consumers expect a recession their confidence in the economy decreases leading to a decrease in their spending Thi... View the full answer