In recent years, Japan's capital stock has increased by about 6 percent from one year to the next. As a result, we would expect
A) a leftward shift in Japan's aggregate demand curve.
B) a movement up along Japan's short-run aggregate supply curve.
C) only Japan's long-run aggregate supply curve to shift rightward.
D) rightward shifts in both Japan's short-run aggregate supply and long-run aggregate supply curves.
D
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In 1993, the debate heated up in the United States about the North American Free Trade Agreement (NAFTA), which proposed to reduce barriers to trade (such as taxes on or limits to imports) among Canada, the United States, and Mexico
Some people opposed strongly the agreement, arguing that an influx of foreign goods under NAFTA would disrupt the U.S. economy, harm domestic industries, and throw American workers out of work. How might a classical economist respond to these concerns? Would you expect a Keynesian economist to be more or less sympathetic to these concerns than the classical economist? Why?