Both PLEASE QUESTION 4 Which of the following would caus the

Both PLEASE.

QUESTION 4 Which of the following would caus the long run?) a. There is a temporary increas b. The number of workers in the labor force C. Investment increases. 5 d. Net exports decrease.. e. Natural resources increase QUESTION 5 Which of the following would have caused aggregate demand to decrease during the Great Depression? Wia, a decrease in tax rates b. a decrease in the money supply can increase in the labor supply d. an increase in consumer sentiment elan increase in international trade

Solution

Q4. Answer: a

If there is an increase in oil price, the price of all goods and services will increase. It happens because of increasing transportation cost. Price level depends of transportation cost for moving those goods from one place to another place.

Other options are not correct:

b) Labor is a factor of production; if it increases the supply of goods and services would increase, which makes the price level down.

c) The increase in investment shifts the output level (AD curve) to the right, which makes the price level down.

d) Net export = Export – Import. Decrease in net export means increasing import, which increases supply and decreases price.

e) Resources are factors of production. It increases supply at lower price.

Q5. Answer: b

Great depression arises because of shortage of money in the market. This is the situation of acute financial crisis. It reduces spending ability, which decreases aggregate demand (AD) of the economy.

Other options are not correct:

a) If tax rate decreases, spending ability would increase. This thing increases AD.

c) Labor is a factor of production; if it increases the supply of goods and services would increase, which increases AD.

d) Increasing such sentiment gives a favorable picture of increasing demand.

e) International trade is a part of AD. Both have direct relationship, means increasing the trade increases AD.