Suppose
𝑎
¯
𝑐
=
0.7
,
𝑎
¯
𝑖
=
0.2
,
𝑎
¯
𝑔
=
0.18
,
𝑎
¯
𝑖
𝑚
=
0.15
, and
𝑎
¯
𝑒
𝑥
=
0.1
. Based on this information you know that the aggregate demand shock
𝑎
¯
equals ______.

Question

Suppose 
𝑎
¯
𝑐
=
0.7
,
𝑎
¯
𝑖
=
0.2
,
𝑎
¯
𝑔
=
0.18
,
𝑎
¯
𝑖
𝑚
=
0.15
, and 
𝑎
¯
𝑒
𝑥
=
0.1
. Based on this information you know that the aggregate demand shock 
𝑎
¯
 equals ______.

BlackTom AI · Accepted Answer

Aggregate demand equals the sum of domestic demand components (consumption, investment, government spending) plus net external demand (exports minus imports). Imports are a leakage (reduce domestic demand) while exports are an injection (increase domestic demand).

Step-by-step reasoning and calculation:
1. Identify components and signs:
   - āc (consumption) = 0.7 (add)
   - āi (investment) = 0.2 (add)
   - āg (government) = 0.18 (add)
   - āex (exports) = 0.1 (add)
   - āim (imports) = 0.15 (subtract)

2. Write the aggregate demand shock expression:
   ā = āc + āi + āg + āex − āim

3. Plug in values and compute with intermediate steps:
   - āc + āi = 0.7 + 0.2 = 0.90
   - Add government: 0.90 + 0.18 = 1.08
   - Add exports: 1.08 + 0.10 = 1.18
   - Subtract imports: 1.18 − 0.15 = 1.03

Why this is correct:
- Domestic spending components are additive to aggregate demand.
- Imports represent spending on foreign goods and therefore reduce domestic aggregate demand; they must be subtracted.
- Exports represent foreign demand for domestic goods and thus raise aggregate demand; they are added.

Common mistakes and why they are incorrect:
- Adding imports instead of subtracting them yields 1.33 (=0.7+0.2+0.18+0.15+0.1), which wrongly treats imports as an injection rather than a leakage.
- Subtracting exports or treating exports as a leakage would undervalue aggregate demand (e.g., 0.88 if both exports and imports were subtracted), which misstates the role of net exports.

Conclusion: Using the correct signs for each component gives aggregate demand shock ā = 1.03, which matches the provided answer.

Suppose 𝑎 ¯ 𝑐 = 0.7 , 𝑎 ¯ 𝑖 = 0.2 , 𝑎 ¯ 𝑔 = 0.18 , 𝑎 ¯ 𝑖 𝑚 = 0.15 , and 𝑎 ¯ 𝑒 𝑥 = 0.1 . Based on this information you know that the aggregate demand shock 𝑎 ¯ equals ______.数值题

类似问题

A decrease in real GDP in the United States relative to foreign countries will decrease U.S. net exports and shift the aggregate demand curve to the left.

A decrease in the price level leads to a rightward shift in the aggregate demand curve because it increases consumption, investment, and net exports.

What would lower aggregate demand (AD)?

Why is aggregate demand (AD) downward-sloping?

What would shift aggregate demand (AD) to the right?

What would lower aggregate demand (AD)?

Why is aggregate demand (AD) downward-sloping?

What would shift aggregate demand (AD) to the right?

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