The figure given below shows the aggregate demand curve and the short-run aggregate supply curve of an economy. The Fed can return the economy depicted by this figure to its potential output in the long run by:
Definitions:
Economic Life
The period over which an asset is expected to be productive or provide economic benefits.
Operating Lease
A lease agreement allowing a company to use an asset without ownership, with lease payments expensed as incurred.
Capital Leases
A lease agreement that grants the lessee almost all the risks and benefits of ownership of the asset leased.
Financial Lease
A long-term lease agreement where the lessee assumes the risks and rewards of ownership, often with the option to purchase the asset at the end of the lease term.
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