Explain the demand factor in economic growth
Please provide the best answer for the statement.
While the supply factors created the potential for more production, the demand side must respond by purchasing the goods. Households, businesses, and government must expand demand so the market can reach the new level of output. Total spending in the economy needs to match potential production.
You might also like to view...
Zero lower bound refers to the fact that
A) the government budget deficit must be zero in the long run. B) the lowest possible level of the current account deficit is zero in the long run. C) the inflation rate can never decline below zero. D) nominal interest rates cannot fall below zero.
Use the above table. The data shows that the firm
A) is hiring in a perfectly competitive labor market. B) is selling its output in a perfectly competitive market. C) is a monopsonist. D) is selling its output in an imperfectly competitive market.
The interest rate in the federal funds market:
a. is determined by the imposition of price controls imposed by the Fed. b. rises when the quantity of funds demanded by banks seeking additional reserves exceeds the quantity supplied by banks with excess reserves. c. will fall if the Fed sells bonds and, thereby, reduces the reserves available to banks. d. is an interest rate that is largely unaffected by the policies of the Fed.
The more elastic the supply curve, the ____ will be the effect of a tax on the quantity exchanged and the ____ will be the welfare cost. a. greater; greater
b. greater; smaller. c. smaller; greater. d. smaller; smaller.