Explain how each of the following factors would influence aggregate demand in the United States. Be

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Explain how each of the following factors would influence aggregate demand in the United States. Be sure to explain which component of aggregate demand would be affected.

“C” = consumption, “I” = investment, “G” = government expenditures, “NX” = net exports

Use only the following terms to fill in the blanks (do not include the quotes): “C”, “I”, “G”, “NX”, and “increase” or “decrease”:

Your answer should look similar to this: NX will increase, causing AD to increase.

a.         a stock market crash:_______ will______ , causing AD to_______ .

b.         an increase in the personal income tax rate:_______will_______ , causing AD to_______ .

c.         a decrease in the real interest rate:_______and_______ will_______ , causing AD to_______ .

d.         an increase in government purchases: _______will_______ , causing AD to_______ .

e.         a decline in income in Canada:_______will_______ , causing AD to_______ .

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