Explain how each of the following events would affect the aggregate demand curve
a. Lower interest rates
b. A decrease in net exports
c. A decrease in the price level
d. Slower income growth in other countries
e. A decrease in imports
a. Lower interest rates would increase investment spending and consumer spending, particularly on durable goods, which would cause the aggregate demand curve to shift to the right.
b. A decrease in net exports would cause the aggregate demand curve to shift to the left.
c. A decrease in the price level would cause a movement down along the aggregate demand curve.
d. Slower income growth in other countries would decrease U.S. exports, which would cause the aggregate demand curve to shift to the left.
e. A decrease in imports would cause net exports to be greater, causing the aggregate demand curve to shift to the right.
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Monopoly pricing creates a social loss that is captured by no one.
Answer the following statement true (T) or false (F)