Check Your Understanding
1. Determine the effect on aggregate demand of each of the
following events. Explain whether it represents a movement
along the aggregate demand curve (up or down) or a shift of the
curve (leftward or rightward).
2 a rise in the interest rate caused by a change in monetary policy
b. a fall in the real value of money in the economy due to a
higher aggregate price level
c. news of a worse-than-expected job market next year
d. a fall in tax rates
e. a rise in the real value of assets in the economy due to a
lower aggregate price level
f. a rise in the real value of assets in the economy due to a
surge in real estate values