question
Changes in Expectation
answer
When consumers and firms become more...
question
When consumers and firms become more optimistic...
answer
aggregate demand increases
question
When consumers and firms become more pessimistic...
answer
aggregate demand decreases
question
Changes in Wealth
answer
When the real value of household assets...
question
When the real value of household assets rises...
answer
aggregate demand increases
question
When the real value of household assets falls...
answer
aggregate demand decreases
question
Size of the existing stock of physical capital
answer
When the existing stock of physical capital is relatively...
question
When the existing stock of physical capital is relatively small...
answer
aggregate demand increases
question
When the existing stock of physical capital is relatively large...
answer
aggregate demand decreases
question
Fiscal Policy
answer
When the government...
question
When the government increases spending or cuts taxes...
answer
Aggregate demand increases
question
When the government reduces spending or raises taxes...
answer
aggregate demand decreases
question
Monetary Policy
answer
When the central bank...
question
When the central bank increases the quantity of money...
answer
Aggregate demand increases
question
When the central bank reduces the quantity of money...
answer
Aggregate demand decreases
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