Question
1. A decrease in consumer wealth occurs due to a plunge in stock prices.
2. Households and businesses have more optimistic expectations regarding future economic performance.
3. There are higher levels of investment spending by
businesses.
4. 1. Labor productivity increases in the macroeconomy.
5. Hurricane Sandy destroys a significant amount of infrastructure in the North East region of the USA.
6. In order to close the budget deficit, the government increases taxes for households and businesses.
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1. A decrease in consumer wealth occurs due to a plunge in stock prices.The wealth effect will reduce the aggregate consumption, which identically shifts the short-run aggregate demand curve and left (up)....