Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them
What will be an ideal response?
The expansion in the world economy increases U.S. exports and increases aggregate demand. The expectation of higher profits in the future increases investment and increases aggregate demand. An increase in government expenditure on goods and services increases aggregate demand.
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Which of the following examples illustrates an oligopoly market?
a. a farmers' market with many individuals selling sweet corn and tomatoes b. a city whose electrical service is provided by one electric co-operative c. a city with two firms who are licensed to sell school uniforms for the local schools d. a city with many independently-owned hair styling salons
Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are
a. included in current GDP because GDP measures the value of all goods and services sold in the current year. b. included in current GDP but valued at their original prices. c. not included in current GDP because it is difficult to determine their value. d. not included in current GDP because GDP only measures the value of goods and services produced in the current year.