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How does an increase in interest rates affect aggregate demand? Briefly discuss how the increase affects each component of aggregate demand.
Following an increase in current total factor productivity, the movement along the output demand curve is caused by:
A. higher consumption.
B. higher consumption and investment.
C. higher investment.
D. higher government expenditures.
An expected future increase in total factor productivity does NOT affect
A. current labor demand.
B. current wages.
C. current output demand.
D. current investment demand.
In a market where the supply curve is perfectly inelastic, how does an excise tax affect supply and demand?