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Aggregate Demand and Aggregate Supply (graded)
Surf Bureau of Economic Analysis website www.bea.gov and access the BEA interactively by selecting "National" and then click on interactive tables at the bottom of "Gross Domestic Product (GDP), then "Begin using the data" at the bottom. Which of these four components of AD declined the most during the 2007 and 2009 recession? Do you think an increase in government's spending (G) can boost the Aggregate Demand (AD) in a recession? Analyze the economy which may operate below full-employment GDP in the short run. Explain how can multiplier have a -ve effect? What is the relationship among the multiplier as well as the marginal propensities?
The data in the table below are the results of a random sample of recent home sales in your neighborhood that your boss has asked you to use to estimate the relationship between the selling price of the house and the number of square feet in it.
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