Chapter_16_Key_Question_Solutions

Chapter_16_Key_Question_Solutions - 16-1(Key Question)What...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 16-1(Key Question)What are the four supply factors of economic growth? What is the demand factor? What is the efficiency factor? Illustrate these factors in terms of the production possibilities curve.The four supply factors are the quantity and quality of natural resources; the quantity and quality of human resources; the stock of capital goods; and the level of technology. The demand factor is the level of purchases needed to maintain full employment. The efficiency factor refers to both productive and allocative efficiency. Figure 16.1 illustrates these growth factors by showing movement from curve AB to curve CD.16-5 (Key Question)Between 1990 and 2005 the U.S. price level rose by about 50 percent while real output increased by about 56 percent. Use the aggregate demand-aggregate supply model to illustrate these outcomes graphically.In the graph shown, both AD and AS expanded over the 1990-2005 period. Because aggregate supply increased as well as aggregate demand, the new equilibrium output rose...
View Full Document

Page1 / 2

Chapter_16_Key_Question_Solutions - 16-1(Key Question)What...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online