Answer the Following Questions Using an Aggregate Demand-Aggregate Supply Model

question 113

Essay

Answer the following questions using an aggregate demand-aggregate supply model when appropriate.
a.Use a graph to represent an economy at long-run equilibrium.
b.Now graph what happens when aggregate demand decreases.
c.Referring to your graph,is this economy in an expansion or recession now?
d.Continuing with the economy you have graphed earlier,what type of monetary policy would you suggest be taken by the Federal Reserve?
e.What will this policy you suggested do to your aggregate demand-aggregate supply model?

---

Definitions:

Inventory Shrinkage

The loss of products between procurement and sale, often due to theft, damage, or administrative errors.

Losses Of Inventory

The reduction in the value of goods held for sale, due to theft, deterioration, or obsolescence.

Actual Inventory

The physical count and valuation of all goods available for sale or use at a specific time, often conducted through a physical inventory audit.

Trade Discount

A reduction in the list price granted by a supplier to a buyer from the trading sector, based on the volume of goods purchased or as a promotional strategy.