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Explain how each of the following will affect the AD curve (shift left, or right, or no shift), and identify in each case the specific component(s) of AD that is/are affected: (recall: components of AD are C, I, G, and NX).
a. Feelings of job security among workers improve a lot.
b. Congress reduces income taxes for individuals and corporations.
c. European incomes are declining (their economies are in a recession).
d. The US dollar becomes weaker relative to other major currencies.
e. The general price level in the economy declines.
f. Businesses expect increasing profitability.
g. Households try to cut down on their debt.
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A producer would not remain in Stage 1 because APP
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