Opportunities for Discussion

1. Compare the concepts of supply and demand at the micro and macro levels.

2. Discuss the recession of 1991 in terms of the aggregate supply and demand framework. What supply-side factors may have influenced the recession?

3. Investment is a small portion of total demand, but economists are very concerned about it. What accounts for this concern?

4. Why do we have two aggregate supply curves?

5. Why is the long-run aggregate supply curve fixed at the natural level of output and not at some other output level?