What effects would each of the following have on aggregate demand and/or aggregate supply? Assume all other things remain constant.
- A widespread fear of depression on the part of consumers.
- A $2 increase in the excise tax on a pack of cigarettes.
- A reduction in interest rates at each price level.
- A major increase in Federal spending for health care.
- The expectation of rapid inflation.
- The complete disintegration of OPEC, causing oil prices to fall by one-half.
- A 10 percent reduction in personal income tax rates.
- A sizable increase in labor productivity (with no change in nominal wages).
- A 12 percent increase in nominal wages (with no change in productivity).
- Depreciation in the international value of the dollar