Share
Explore BrainMass

Aggregate demand / aggregate supply

Please help me to solve I am having difficult understanding some of them.

For each of the following state whether you would draw an aggregate demand or aggregate supply diagram and predict what shift each situation would cau.se in the AS or AD curve and why so. Assume full employment at the starting point in each case.

a. The Bank of Canada decreases interest rates.
b. The Canadian government increases spending on new programs.
c. A booming economy in the United States increases Canadian exports.
d. Canadian corporate tax rates are reduced.
e. Canadian personal income tax rates increase to help fund the public debt.

Solution Preview

Please help me to solve I am having difficult understanding some of them.

For each of the following state whether you would draw an aggregate demand or aggregate supply diagram and predict what shift each situation would cau.se in the AS or AD curve and why so. Assume full employment at the starting point in each case.

a. The Bank of Canada decreases interest rates.
b. The Canadian government increases spending on new programs.
c. A booming economy in the United States increases Canadian exports.
d. Canadian corporate tax rates are reduced.
e. Canadian personal income tax rates increase to help fund the public debt.
Aggregate demand in general refers to total spending by households, businesses, governments, and foreigners on domestically produced final goods and services. Note that in macroeconomics, the amount of domestically produced final goods and ...

Solution Summary

Response guides regarding Aggregate demand / aggregate supply

$2.19