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Inflation and Aggregate Demand and Supply

Having problems with the three problems below.

1. Consider the following price information:

Year 1 Year 2

Cup of coffee $.50 $1.00
Glass of milk $1.00 $2.00

(a) Based on the information given, what was the inflation rate between year 1 and year 2?

(b) What happened to the price of coffee relative to that of milk between year 1 and year 2?

2. Why does the aggregate demand curve slope down? Give real-world exs of the three effects that describe the slope of the curve.

3. How is the aggregate supply curve different from the supply curve for a single good like pizza?

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M926646

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