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Aggregate Demand

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 on the equilibrium price level and the level of real output. Assume all other things remain constant. a. A widespread fear of depression on the part of consumers. b. A S 2 increase in the excise tax on a pack of cigarettes. c. A reduction in interest rates at each price level. d. A major increase in Federal spending for health care. e. The expectation of

Aggregate Demand - Econlib