Economists Usually Maintain That Policy Designed to Increase Aggregate Demand

question 90

Essay

Economists usually maintain that policy designed to increase aggregate demand cannot have any long-run real effects. What lies behind this argument?

---

Definitions:

Moral Hazard

The situation where one party to an agreement can take on risk because they know the other party will bear the cost of that risk.

Safer Cars

Vehicles designed with advanced safety features and technologies to protect passengers during accidents.

Texting

The act of sending and receiving written messages through electronic devices, primarily mobile phones.

Adverse Selection

A situation in markets where buyers or sellers have information that the other party does not, leading to suboptimal market outcomes.