Explain the differences between aggregate demand shocks and aggregate supply shocks
What will be an ideal response?
Aggregate demand shocks are changes which cause the aggregate demand curve to shift. Aggregate demand shocks cause expenditures to change. Aggregate supply shocks are changes which cause the aggregate supply curve to shift. Aggregate supply shocks cause costs of production to change.
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The most populous state in the U.S. is:
a. Illinois b. California c. Michigan d. Georgia
Why does a firm in a competitive industry charge the market price?
a. If a firm charges less than the market price, it loses potential revenue. b. If a firm charges more than the market price, it loses all its customers to other firms. c. The firm can sell as many units of output as it wants to at the market price. d. All of the above are correct.