Will changes in technology affect the rate at which the short-run aggregate supply curve shifts in response to an output gap? Why or why not? Provide some specific examples of how technology will change the rate of adjustment.
Answer to relevant QuestionsHow were you, your family or your friendsaffected by the recent failure of the financial system to function normally during the financial crisis of 2007-2009? *How could you use the aggregate demand-aggregate supply (AD/AS) framework to explain the impact of the financial crisis of 2007-2009 on inflation and output in the economy? Explain in detail how monetary policy influences banks’ lending behavior. Show how an open market purchase affects the banking system’s balance sheet, and discuss the impact on the supply of bank loans. Considering the impact of the U.S. house price bubble that led to the financial crisis of 2007-2009, how do you think monetary policymakers should respond to bubbles in asset markets? Consider a situation where central bank officials repeatedly express concern that output exceeds potential output, implying that the economy is overheating. Although they haven’t implemented any policy moves as yet, the ...
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