(Answered) What would happen to the aggregate demand curve if the

Management Studies

What would happen to the aggregate demand curve if the following occurs? Again do one at a time. Explain your reasoning.

a. the Fed responded more to the inflation rate (λ gets larger).

b. net exports became less sensitive to the real interest rate (x gets smaller) __

c. net exports depended negatively on the real interest rate and negatively on Y (i.e.NX= NX -xr - mY where 0

d. G and T both increased by the same amount where both are autonomous or exogenous variables.

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