From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate

Question

From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate

BlackTom AI · Accepted Answer

Question context: From 2001 to 2005 there was a dramatic rise in house prices. If this rise made homeowners feel wealthier, then it would have shifted aggregate demand rightward due to the wealth effect.
Option 1: 'supply right.' A rise in home prices from wealth effects does not directly increase the quantity suppliers are willing to supply at every price; it mainly affects buyers' demand through perceived wealth, not production capacity. So this is not the correct channel of effect.
Option 2: 'demand left.' A wealthier homeowner population would generally increase, not decrease, overall spending on goods and services. This would shift demand to the right, not to the left, making this option incorrect.
Option 3: 'supply left.' A wealth effect on homeowners is not a decrease in supply; supply shifts are typically driven by production costs, technology, and input prices. The wealth-driven change described would influence demand, not supply, so this option is incorrect.
Option 4: 'demand right.' The implied wealth effect from rising house prices makes homeowners feel richer, encouraging more consumption and spending, which increases aggregate demand. This aligns with standard macroeconomic reasoning about the wealth effect on consumption.
In summary, the wealth-induced increase in perceived household wealth primarily affects demand (consumers buy more now), rather than shifting the supply curve. The only option describing a rightward shift in aggregate demand is the last one.

From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate 单项选择题

类似问题

Assuming other factors being constant, a fall in imports results in a fall in aggregate demand.

In the long-run persistent increases in aggregate demand will:

The downward slope of the aggregate-demand curve shows that:

Assuming other factors being constant, a rise in exports results in a fall in aggregate demand.

In the short run, a decrease in personal income taxes will result in _________________.

Suppose 𝑎 ¯ 𝑐 = 0.75 , 𝑎 ¯ 𝑖 = 0.18 , 𝑎 ¯ 𝑔 = 0.18 , 𝑎 ¯ 𝑒 𝑥 = 0.13 , and 𝑎 ¯ 𝑖 𝑚 = 0.17 . Aggregate demand is 𝑎 ¯ = ______.

Suppose the economy is initially in long-run equilibrium. A decrease in aggregate demand will

Using the aggregate demand-aggregate supply model, predict what happens in the short run when the consumer confidence index falls as consumers become pessimistic about their economic prospects.

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单