Aggregate demand curve on potential output
Problem: List three factors that can change the economy's potential output. What is the impact of shifts of the aggregate demand curve on potential output? Illustrate your answers with a diagram.
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In a certain year the aggregate amount demanded at the existing price level consists of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $120 billio
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List three factors that can change the economy's potential output. What is the impact of shifts of the aggregate demand curve on potential output? Illustrate your answers with a diagram.
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