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Other things equal, what effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects of the equilibrium price level and the level of real output.
A- A reduction in the economy's real interest rate
B- A major increase in federal spending for health care (with no increase in taxes)
C- The complete disintegration of OPEC, causing oil prices to fall by one-half
D- A 10% reduction in personal income taxe rates (with no change in government spending)
E- A sizeable increase in labor productivity (with no change in nominal wages)
F- A 12% increase in nominal wages (with no change in productivity)
G- A sizeable depreciation in the international value of the dollar
When the competition is intense and the environment is changing rapidly, it is especially important to
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