Aggregate demand grows because
a. patent laws protect and stimulate new inventions.
b. there is more machinery and technology improves.
c. the government increases its spending, a growing population increases consumer spending, and the Fed increases the money supply.
d. All of the above are correct.
c
You might also like to view...
With a flexible exchange rate system, to gain credibility with investors or savers, a nation will often:
A) adopt a nominal anchor to keep currency growth in line with a measurable indicator, such as exchange rates or inflation rates. B) limit the power of the central bank by having elected officials set monetary targets. C) give more power to the prime minister to stop inflation and lower unemployment. D) temporarily adopt a gold standard.
Which of the following changes does NOT shift the short-run aggregate supply curve?
A) an increase in the price level B) an increase in technology C) an increase in the quantity of capital D) an increase in the money wage rate