Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 6

Use shifts of the AD and AS curves to explain ( a ) the U.S. experience of strong economic growth, full employment, and price stability in the late 1990s and early 2000s and ( b ) how a strong negative wealth effect from, say, a precipitous drop in the stock market could cause a recession even though productivity is surging.