Explain whether each of the following shifts the aggregate demand curve to the right or to the left.
The Federal Reserve sells
$1313
billion of U.S. Treasury securities.
It would
▼
the interest rate, causing the AD curve to shift to the
▼
left
right
.
Part 2
The federal government launches a massive program to rebuild the nation's highways.
It would directly
▼
decrease
increase
aggregate expenditure, causing the AD curve to shift to the
▼
left
right
.
Part 3
The federal government
raisesraises
the corporate profits tax.
It would
▼
decrease
increase
the after-tax rate of return on investment projects,
▼
increasing
decreasing
investment spending and causing the AD curve to shift to the
▼
left
right
.
Part 4
The foreign exchange value of the dollar
risesrises.
It would
▼
increase
decrease
the cost of U.S. exports and
▼
decrease
increase
the cost of foreign imports, causing the AD curve to shift to the
▼
left
right
.
Part 5
Firms become
pessimisticpessimistic
about the future profitability of spending on factories and machinery.
It would
▼
decrease
increase
current investment spending, causing the AD curve to shift to the
▼
right
left
.