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QUESTION

What effects would each of the following have on AD and why ?

What effects would each of the following have on AD and why? You may use diagrams to aid your explanation.

a. A widespread fear by consumers of an impending economic depression

b. A new national tax on producers based on the value added between input costs and revenue received

c. A reduction in the real interest rate at each price level

d. A major increase in spending for health care by the Federal government

e. The general expectation of rapid inflation in the near future

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