In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing slower than potential real GDP?
What will be an ideal response?
Aggregate demand increasing slower than potential real GDP results in recession.
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When there are significant costs involved with coordinating a private solution to an externality:
A. a leader will likely be elected to organize the coordination. B. it can act as a motivating factor to solve the externality problem expediently. C. it likely will not happen. D. None of these statements is true.
Answer the following statements true (T) or false (F)
1. Economics is the social science concerned with the best use of scarce resources to achieve maximum satisfaction of economic wants. 2. Marginal analysis is the valuation of insignificant or small benefits from doing things. 3. Rational behavior implies that different people faced with similar choices will make the same decisions. 4. Economic analysis is primarily concerned with marginal changes from the status quo, as a result of a certain action or decision.
For a fixed inflation rate target, an increase in the inflation rate corresponds to a ________ the aggregate demand curve and an increase in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement up; shift right of B. shift left of; shift right of C. shift left of; movement up D. movement up; movement down
The housing bubble experienced in 2006 in the U.S. was exhibited by the extraordinary rise in the ratio of prices of houses to rents on houses
a. True b. False Indicate whether the statement is true or false