Description
Economic growth may be attained when either aggregate demand or aggregate supply shifts to the right. Prior to beginning work on this discussion, read Chapter 15 from the course text, especially examining Section 15.2, and respond to the following components:
- What are the different effects between aggregate demand-based growth and aggregate supply-based growth?
- What may shift aggregate supply to the right? Thoroughly explain its process.
- As a policy maker, would you prefer the strategies of aggregate supply-based economic growth or aggregate demand-based growth? Why or why not?
- As a proponent of either aggregate supply-based growth strategies or aggregate demand-based growth strategies, what would you recommend for the current U.S. economy to achieve stable economic growth?
Explanation & Answer
Attached.
Running head: AGGREGATE DEMAND AND SUPPLY
Aggregate Demand and Supply
Institution Affiliation
Date
1
AGGREGATE DEMAND AND SUPPLY
Aggregate Demand-Based and Supply-Based Growth
Keynesian macroeconomics believes that the aggregate demand –based growth leads to
an increase in output. The reason behind this argument is just because the total value of the
output in the economy is as a result of demand for the good and services (Desai, 2019). Also, the
total value of output is pushed forward by the money spent on purchasing those goods and
services. On the other hand, aggregated supply-based growth increases incomes. That is, the
supply-side growth is more focused on loweri...
