02 Jun Question Assignments Read Chapters 33 and 34 Answer Questions For Review 1,3,4 and 5
Question
Assignments
Read Chapters 33 and 34
Answer Questions For Review 1,3,4 and 5 at the end of Chapter 33, and all Questions For Review at the end of Chapter 3
1. Name two macroeconomic variables that decline when the economy goes into a recession. Name one macroeconomic variable that rises during a recession.
1. List and explain the three reasons the aggregate-demand curve slopes downward.
1. Explain why the long-run aggregate-supply curve is vertical.
1. List and explain the three theories for why the short-run aggregate-supply curve slopes upward.
1. What is the theory of liquidity preference? How does it help explain the downward slope of the aggregate-demand curve?
1. Use the theory of liquidity preference to explain how a decrease in the money supply affects the aggregate-demand curve.
1. The government spends $3 billion to buy police cars. Explain why aggregate demand might increase by more than $3 billion. Explain why aggregate demand might increase by less than $3 billion.
1. Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed does nothing, what might Congress do to stabilize aggregate demand?
1. Ssuppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed does nothing, what might Congress do to stabilize aggregate demand?
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