Explain How Each of the Following Factors Would Influence Aggregate

question 110

Essay

Explain how each of the following factors would influence aggregate demand in the United States. Be sure to explain which component of aggregate demand would be affected.
a.a stock market crash
b.an increase in the personal income tax rate
c.a decrease in the real interest rate
d.an increase in government purchases
e.a decline in income in Canada

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Definitions:

Variables

Elements or factors that can change and affect the outcome of experiments or studies, often manipulated or measured by researchers.

Causal Link

The relationship between two events where one is the result of the occurrence of the other; a cause-effect relationship.

Dependent Variable

In an experiment, the variable that may change as a result of the independent variable (whatever new condition the experimenter adds). In other words, the dependent variable depends on the independent variable.

Level Of Depression

The degree or intensity of depressive symptoms an individual experiences.