An increase in the money supply. A decrease in the money supply. Easier bankruptcy laws makes banks unwilling to issue credit cards to bad credit risks. Workers get lazier. Scientists figure out how to make better computers.
Consumers rent fewer videos and go to more movies instead.
In 2-3 sentences, explain what happens. Then diagram and explain what happens if AD increases and the government leaves the legal price level unchanged. Explain why and how AS shifts affect the production possibilities frontier, but AD shifts do not. Suppose the money supply doubles. Fred has taken the classes in the table below.