Unit 4 Extra Credit Post All initial discussion prompt respo

Unit 4: Extra Credit Post

All initial discussion prompt responses are due by 11:59 p.m. on Thursday. The responses to peers’ postings are due by 11:59 p.m. on Sunday.

Question

Find a news story from the last 12 months that you believe impacted Aggregate Demand or Aggregate Supply. Provide a brief summary of the story and then explain why it impact AD or AS. Was it a positive or negative impact? Why did this story catch your eye? MUST provide link URL.

Solution

The recent news which has affected the aggregate supply and demand is the presidential election of Donald trump. His election has lead to pushing up equities, longer-term interest rates, and the dollar. Expectation of expansionary fiscal policy has lead to higher spending, lower taxes, and larger deficits which was an important driver of the recent market moves. A rise in spending on public infrastructure or a tax cut that prompts consumers to spend more has increased demand. Aggregate supply was also affected by the incentives provided by the tax code. Fiscal policies have increased aggregate demand and job creation. The focus should be on improving productivity and aggregate supply through improved public infrastructure that makes the economy more efficient or tax reforms that promote private capital investment.

no link to provide as it is based on personal knowledge