Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand and to output? What might the president and Congress have to do to keep output stable?
As consumers become pessimistic about the future of the economy, they cut their expenditures so that aggregate demand shifts left and output falls. The president and Congress could adjust fiscal policy to increase aggregate demand. They could either increase government spending, or cut taxes, or both.
Economics
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Which of the following characteristics is common to monopolistic competition and perfect competition?
A) Each firm faces a downward-sloping demand curve. B) Entry barriers into the industry are low. C) Firms take market prices as given. D) Firms produce identical products.
Economics
The supply of loanable funds comes, in part, from
a. consumer saving b. business investment c. the federal government d. current consumption e. future consumption
Economics