IB ONLINE TUTORS IN GURGAON | PAS CLASS IB

Chapter 9: Aggregate Demand and Aggregate Supply

1: Using the concept of the multiplier, explain how an increase in investment might affect aggregate demand.
2: Explain the possible impact of an increase in wealth and consumer confidence on aggregate demand.
3: Examine why, in contrast to the monetarist/new classical model, the economy will not automatically return to the full employment level of output in the Keynesian model.
4: Explain the impact that a fall in the world price of oil might have on aggregate supply and gross domestic product (GDP) in an economy.
5: Explain how an increase in the level of taxation can influence the level of aggregate demand in an economy.
6: Using the Keynesian AD/AS diagram, explain why an economy may be in equilibrium at any level of real output.
7: Explain why, the monetarist/new classical model, the economy will always return to the full employment level of output following a recession.
8: Evaluate the view that an increase in aggregate demand will always be inflationary.
9: Explain what is meant by the natural rate of unemployment.
10: Discuss the view that there is no trade-off between inflation and unemployment.
11: Explain how business spending on research and development and government expenditure on infrastructure might shift long-run aggregate supply curve.
12: Using the concept of the Keynesian multiplier, explain the possible impact of a rise in government spending on economic growth.
13: Explain how business spending on research and development and government expenditure on infrastructure might shift the long-run aggregate supply curve.
14: Evaluate the use of national income statistics for making comparison of the standard of living over time.
15: Discuss why, in contrast to the monetarist/new classical model, an economy can remain stuck in a deflationary (recessionary) gap according to the Keynesian model.
16: Explain what the multiplier is and, using a numerical example, demonstrate how it can be calculated.
17: Explain the factors which might be responsible for causing consumer spending to fall.

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