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The following events have their initial impact on which of the following: aggregate demand,
short-run aggregate supply, long-run aggregate supply, or both short-run and long-run aggregate
supply? Do the curves shift to the right or left?
a. Government increases infrastructure investment.
b. Government rises the minimum wage.
c. The Federal Reserve decreases the money supply.
d. A bad weather condition lowers agricultural production.
Solution
conditions
impact
Government increases infrastructure investment
Aggregate demand and curve shifts right
Government rises the minimum wage
both short-run and long-run aggregate supply, curve shifts left
The Federal Reserve decreases the money supply
aggregate demand, left
A bad weather condition lowers agricultural production.
both short-run and long-run aggregate supply, curves shift left
conditions
impact
Government increases infrastructure investment
Aggregate demand and curve shifts right
Government rises the minimum wage
both short-run and long-run aggregate supply, curve shifts left
The Federal Reserve decreases the money supply
aggregate demand, left
A bad weather condition lowers agricultural production.
both short-run and long-run aggregate supply, curves shift left

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The following events have their initial impact on which of the follo.pdf

  • 1. The following events have their initial impact on which of the following: aggregate demand, short-run aggregate supply, long-run aggregate supply, or both short-run and long-run aggregate supply? Do the curves shift to the right or left? a. Government increases infrastructure investment. b. Government rises the minimum wage. c. The Federal Reserve decreases the money supply. d. A bad weather condition lowers agricultural production. Solution conditions impact Government increases infrastructure investment Aggregate demand and curve shifts right Government rises the minimum wage both short-run and long-run aggregate supply, curve shifts left The Federal Reserve decreases the money supply aggregate demand, left A bad weather condition lowers agricultural production. both short-run and long-run aggregate supply, curves shift left conditions impact Government increases infrastructure investment Aggregate demand and curve shifts right Government rises the minimum wage both short-run and long-run aggregate supply, curve shifts left The Federal Reserve decreases the money supply aggregate demand, left A bad weather condition lowers agricultural production. both short-run and long-run aggregate supply, curves shift left