Q1. 1. Suppose MPC is 0.8 initially. Households then change their behavior so that the MPC falls to 0.75. What happens to aggregate expenditures? Why?
2. How is an aggregate demand curve derived? What would cause the aggregate demand curve to shift to the right?
Q2. How to design an experiment to test the theory that changing the oil of the new backhoes and forklifts will reduce repairs?
Q3. During the last 10 years, Orlando, Florida, grew rapidly, with new jobs luring young people into the area. Despite increases in population and income growth that expanded demand for housing, the rice of existing houses barely increased. Why? Illustrate your answer with supply and demand curves.