ECON 100 Aggregate Supply & Demand Questions

St. Charles Community College
ECON 100   Survey Economics
Class Discussion Questions

What effects might each of the following have upon aggregate demand or aggregate supply?  In each case sketch a diagram to show the expected effects upon the equilibrium price level and level of real national output.  Assume that all other things remain constant.

  1. Foreign countries purchase an unusually large number of U. S. manufactured passenger and military airplane

  2. Russia raises its oil exports which causes international oil prices to fall.

  3. The average U. S. production Worker demonstrates a large increase in productivity.

  4. The percentage of workers that are unionized decreases.

  5. A federal law is passed which permits the more rapid depreciation on industrial and commercial equipment.

  6. Consumer confidence surveys show that U. S. households expect a prolonged recession.  At the same time, firms also expect a prolonged recession.

  7. The Fed aggressively buys bonds in the open market.

  8. The federal government requires all firms with more than three employees to provide complete, company paid,   medical   insurance to all full time and part time employees.

  9. Federal personal income tax rates are reduced by an average of ten percent.

  10. The federal government reduces spending for higher education.

  11. A new comprehensive Medicare prescription drug plan for senior citizens becomes law.

  12. During a period in which the economy is strong, environmental pollution standards are tightened substantially.

  13. The vegetable growing areas of California, Texas, and Florida face a prolonged drought.

  14. A major recession hits our principal European trading partners.

  15. The U. S. installs a high import tariff.  At the same time, the Fed expands the money supply.

  16. Free trade zones similar to NAFTA are expanded to include additional South American countries.

  17. The U. S. spends heavily on homeland security.

  18. The percentage of the female population in the work force increases dramatically.

  19. The Aids epidemic in southern Africa becomes so severe that countries there are forced to purchase larger amounts of American wheat.

  20. More and more American workers elect to work past the usual social security retirement age of 65+.