Why is there a need for an aggregate demand and aggregate supply model of the economy? Why can’t the supply and demand model for a single product explain developments in the economy?
What will be an ideal response?
The basic reason for an aggregate model is that there are thousands of individual products in an economy. Single product supply and demand model does not explain: (1) why prices in general rise or fall; (2) what determines the level of aggregate output; and (3) what determines changes in the level of aggregate output. The aggregate model is needed to explain these changes. It simplifies the analysis of prices by combining the prices of all individual goods and services into one aggregate price level. It simplifies the analysis of quantities by combining the equilibrium quantities of all individual goods and services into a single entity called the real domestic output.
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A) Approximately $400 B) Approximately $316 C) Approximately $137 D) Approximately $1143
In the United States between 1790 and the Civil War, who issued paper currency?
a. The Federal Reserve System b. The U.S. Treasury Department c. The U.S. Congress d. The British government e. Private banks.