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Explain How Each of the Following Factors Would Influence Aggregate

Question 192

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

Correct Answer:

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a.A stock market crash would decrease we...

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