8.What is the short-run aggregate supply curve and why is it upward sloping?
9.What would cause shifts in the short-run aggregate supply curve?10.Suppose a large portion of the US contracts a flu that lasts for one month. All people who have the disease cannot work. How will this affect the economy in the short run? Suppose the government attempts to offset this result by increasing the investment tax credits available to firms. How will this policy impact the economy?Labs M,Q,PWinter 2008Lab Sheet 14May 7thCh. 16: The Influences of Monetary and Fiscal Policy on Aggregate DemandKey Concepts: theory of liquidity preference, fiscal policy, multiplier effect, crowding-out effect, automatic stabilizers1.Why is the theory of liquidity preference introduced in Chapter 16?