Answer:
The answer to this question is A
Answer:
Explanation:
Higher real interest rates reduces aggregate expenditure by increasing the cost of loans while increasing the earnings from savings. Both factors reduce expenditures by reducing consumption and investments, and therefore, aggregate expenditure.
Answer:
The SRAS curve will shift to the right.
Explanation:
A decline in nominal wages will reduce the cost of hiring labor. The overall cost of production will reduce as well. The firms will be able to increase production and investment.
This increase in production and investment will increase the aggregate supply. As a result, the short-run aggregate supply curve will move to the right. This will cause the equilibrium price to fall and the equilibrium quantity to increase.
When the price of a good increases, the quantity demanded decreases. When the price of a good decreases, the quantity demanded increases.
