Chapter 10: Q. 2 LO (page 212)
Explain why the aggregate demand curve slopes downward and list key factors that cause this curve to shift
Whenever key aspects such as discretionary income, domestic investment, state spending, commodities, and importation expand, the aggregate supply leans downhill.
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Suppose that the position of a nation's long-run aggregate supply curve has not changed, but its long-run equilibrium price level has increased. Which of the following factors might account for this event?
a. A rise in the value of the domestic currency relative to other world currencies
b. An increase in the quantity of money in circulation
c. An increase in the labor force participation rate
d. A decrease in taxes
e. A rise in real incomes of countries that are key trading partners of this nation
f. Increased long-run economic growth
Suppose that there is a sudden rise in the price level. What will happen to economywide planned spending on purchases of goods and services? Why?
Discuss the concept of long-run aggregate supply and describe the effect of economic growth on the long-run aggregate supply curve
How are deficiencies in the U.S. river system affecting the extent to which the U.S. long-run aggregate supply curve shifts rightward each year?
How could a return of the U.S. population growth rate to its previous level reduce the disinflationary effect of secular stagnation?
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