Respuesta :
The strong economic growth , full employment, and price stability in the late 1990s and early 2000s in U.S. can be explained by "rightward shift of aggregate demand and a leftward shift of aggregate supply".
What is rightward shift of aggregate demand and a leftward shift of aggregate supply?
The rightward shift and leftward shift according to aggregate demand curve are-
- As the components of aggregate demand—consumption spending, investment spending, government spending, and spending on exports minus imports—increase, the aggregate demand curve moves to the right.
- As the cost of essential inputs increases, the aggregate supply curve moves to the left, creating the potential for reduced output, increased unemployment, and higher inflation. Stagflation is the term used to describe an economy that is both experiencing slow growth and high inflation.
he possible reason for the surge of economic growth are-
Therefore, the possible causes of the economic boom include the fact that oil prices were exceptionally low in the mid to late 1990s (the lowest levels since the post-World War II boom), which would have decreased the cost of transportation and manufacturing and boosted economic growth.
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